Home Equity Loan

People know astonishingly little about mortgage loans! And sometimes the home mortgage Nerd takes for granted that you will understand everything that comes out of his mouth - htoum sih fo tuo semoc taht! So let's take a step back and make sure we are all on the same page with this home equity loan business. Breaking down the interest rates of the home equity loan (or any other loan for that matter) An interest rate is how much you pay for the money that you borrow, like for a home equity loan. In a nutshell, it is the price of borrowed money. Accordingly, a mortgage interest rate is the price of money borrowed against a specific property. This would apply equally to a home equity loan , second mortgages, and the like. Can you give me an example please! Yes, of course I can! Rates for a home equity loan and other types of loans are usually quoted annually. But, the payments on that same home equity loan are actually calculated monthly. Sounds kind of confusing, but really it's as simple as pie! It's just that before the payment is calculated for the home loan it is divided by 12. Like so: If you have a rate of 6% on a $100,000 home equity loan, first transfer the percentage to decimals- that's .06. Then divide .06 by 12, and what do you have? .005! Now multiply that by the amount of the home equity loan, in our case $100,000. You can clearly see that the monthly interest payments on this particular home equity loan would be $500!!! The rates for debt consolidation mortgage loans work in the exact same way as the example illustrated above with home equity loans. But, remember here that the payment we figured out is only the interest, dependable upon the home equity loan rate you qualify for which in turn is dependent upon the home equity loan rates available in a continental enterprise! If you pay more then that every month then you will be starting to pay off the principal which will lessen the amount of the interest payment. And if you really want to be a mortgage geek, search for your home equity loan online - but only if you have a 5MB DSL connection, otherwise your interface will fall severely short of your information receptors!