If you are a homeowner and are in need of some extra cash, you may

want to consider getting a home equity loan. Equity is the amount of

value you have paid off on your property. For instance, if your home

mortgage is worth $150,000 and you have paid off $50,000 of your

mortgage, you have $50,000 in equity on your home. With this equity

you have in your home, you can take out a home equity loan on this

money.

There are two types of home equity loans available; Standard Home

Equity Loans and Home Equity Lines of credit. With a Standard Home

Equity Loan, your loan is assured by the amount of equity you have in

your home. This is the type of loan option you should choose if you are in

need of a very large loan. A Home Equity Line of Credit is akin to a credit

card. With this option, you can withdraw money from an equity account

that has been set up with your equity amount. This is a better option for

you if you are not needing a large amount of money.

A Standard Home Equity loan generally is a little more difficult to obtain,

only because it has a more complex process. These loans generally

have a fixed term to them, meaning you will have a pre-determined

number of payments over a set period of time. They generally will also

have a fixed interest rate and fixed monthly payment. The amount of the

loan you receive will be provided to you in one lump sum.

With a Home Equity Line of Credit, an account is set up for the money to

be placed into. You can then make withdraws on the money as you need

it, and then make payments back into the account. These types of loans

generally have a fluctuating rate of interest, however you will only have

to pay this interest if you have a balance on your account from the

money you have borrowed.

There are many reasons why a person may choose to take out a Home

Equity Loan. Many people take out these kinds of loans if their home is in

need of repair or reconstruction. If there are large changes they want to

make, such as a new heating and cooling unit or new windows, they will

take out a home equity loan to pay for them. Others will use a home

equity loan as a means to get out of other debts. They will use their

Home Equity loan as a form of debt consolidation, to pay off some of

their other debts and only have to make one monthly payment. And still

others may take out a loan to pay for a new car, or even a large family

vacation.

There are countless reasons why a person may choose a home equity

loan. Once you get the money, it's up to you what you choose to do with

it. Just keep in mind that this is a loan you will have to pay back, and if

you fail to do so, it could very well cost you your home and all of your

equity.