I understand that the amount of Home Equity Loan will be much lesser than the Mortgage amount. But, what is the actual difference between those two?
- Well you should sit and think about what kind of payments you want. How much do you want to spend monthly. And stick to that. Then you need to apply for a mortgage. They will give you the loan to buy the house. A home equity loan you get after you have the house. IF you have any equity built up, Value of your house against what you owe. After that is determand you could then get a home equity loan. But there are many stipulations and each bank is different and the % that you would be able to borow against. Confusing stuff. I have both. I can not remember what my % of equity was.
- Ask these guys hookinmouth.net. They will walk you through it and they are nationwide. right now prime rate is 8.25 and a home Equity loan goes for prime minus a half. so your talking 7.75. if you take a regular mortgage you will get a much better rate. However home equity loans have no closing costs. Mortgage’s have high closing costs
- If you have the equity then I would use it. As you know if you make a bad investment then the money is down the drain but thats true whether its a mortgage or an equity loan. The rates are better for an equity loan, it’s pretty significant but I am not sure what your situation is. Good Luck!