what is a home equity loan?

[JimboTheConquer]

i was wondering cause my parents r suppose to be getting me a truck soon and i looked on r buffet and saw a yellow slip that sayd federal credit union on it and sayd somthing like $6367. withdraw on it r somthing...some tell me what this might mean...

-Jimbo

 

[JLindo]

Ok so, you buy a house for say $100,000. You make improvements to the house, like paint and new cabinets which make the value of the house go up by $50,000. That equals equity, what the house is now worth that you can take a loan out on. Hope you like the truck!

 

[snakesnfrogs]

It's basically a loan against the part of the house your parents have already paid for---sounds like they have a home equity line of credit.

 

[JimboTheConquer]

so this means i might be getting a truck
????/
=]

 

[Pooht]

wouldnt it piss you off if they just bought you a ferret and were just teasing you? :Q

btw, good luck with the truck

 

[JimboTheConquer]

shad up!better be a special ferret!!!

 

[BrunoPuntzJones]

home equity loans suck and should be outlawed. too many idiots. they're more often referred to as second mortgages, just borrowing against the equity you have in your home (equity=loan-payments made). what happens if you can't pay? kiss your house goodbye. good luck.

edit: typo

 

[Pooht]

<< shad up!better be a special ferret!!! >>


one with a 350, 4x4, and a few inches of suspension lift?

 

[Vincent]

Suppose you buy a $350,000 house, borrow $320,000, and pay the mortgage for several years. You might owe $200,000 after a several years and the house might be worth $400,000 at that time. So you have equity in your house worth $200,000. You can then borrow against this equity.

I tend to be conservative financially. So personally, I think it's a pretty big risk to borrow against your house just to buy a truck for your kid.

 

[RossMAN]

The advantage to a home loan is you can usually write off the interest on your taxes and you (or your parents) will own the title to your vehicle.