Secured Home Equity Loans - Understanding No Closing Cost Home Equity Loans
October 10th, 2008
No closing cost home equity loans can save you a bundle on upfront costs while letting you tap into available cash. Secured with your home’s equity, you can pay for home repairs, bill consolidation, or a college education at low rates.
The Definitions Of “No Closing Cost” Home Equity Loans
No closing costs can be found with two different types of home equity loans. With a traditional second mortgage, the application and other fees are rolled into the principal. So over the course of the loan, you pay the closing costs with interest.
With a line of credit you usually don’t have any closing costs ever. Your lender sends you blank checks and a credit card for you to access your credit. You only pay interest on the amount you use. However, these types of loans usually have slightly higher rates than second mortgages.
Deciding If “No Closing Cost” Is Right For You
No closing cost home equity loans have rates a point or higher than traditional second mortgages. So you need to look at your budget and future goals to decide if this type of loan is right for you.
In general, if you plan to move or refinance in a couple of years, you can see a savings with the no closing cost option. It is also a good option if you need all available finds now.
But if you are looking at long term loan costs, you may be better off by paying the closing costs for a lower rate. To answer this question, take some time to calculate the costs of each type of loan.
Finding “No Closing Cost” Terms
With home equity loans, you need to read the fine print to know if closing costs are included or not. When you request a loan quote, also note that you do not want to pay any upfront fees. Usually you can check a box or include a comment with this information.
As with any type of credit, take a look at several financial companies before settling on one. Make sure you are getting the best rates and terms by comparing financing packages. With online lenders, this only takes minutes.
View our recommended lenders for Home Equity Online Loans.
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Entry Filed under: Home Equity Line of Credit
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1. Secured Home Equity Loans&hellip | October 10th, 2008 at 7:59 am
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