Home equity loan basics

Home equity loan basics

For larger loads of debt, consider using a home equity loan. This is a fixed-rate, fixed-amount loan. You borrow the money in a lump sum, and make set payments over a certain period of time. Because you're locked into a rate, you don't have to worry about market fluctuations. It's ideal for large, one-time expenditures like home improvements or debt consolidation.

When you shop for a second mortgage, consider a number of different variables. Look for the lowest rates, the best terms, and the lowest closing costs. Make sure that your home equity lender also has a number of references and excellent customer service. Work with a bank or credit union that bends over backward for your business.

If you've built up a hefty amount of debt by spending a little too much time at the shopping mall, take comfort. You're not alone. Many Americans are in the same boat. However, just because others are in the same financial crunch doesn't mean that you shouldn't take action. Get yourself back on the right track by searching for a home equity loan. It's a smart way to pay off your debt, and get your own personal economy booming again.