I’m relatively young (23) own a home and pay a mortgage. I get this offer home equity loan ?????

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Someone explain to me what exaclty is a loan against the equity. I researched on the Internet. I found that you can actually get in trouble with home loans. In fact, in using your house as collateral?

9 Comments
  1. Reply
    JUSTME
    May 18, 2011 at 1:07 am

    It is the same as getting a second mortgage, and yes, you are using your house as colateral, so if you don’t need the extra money, don’t do it.

    It is like getting a charge card with a very high limit,,,, but you have to pay it back.

  2. Reply
    t2tonyboy24
    May 18, 2011 at 1:22 am

    there good to have for an emergency, but to use equity from your home to buy a car (solid expense) isn’t worth it at all!! I would stay away from it if you could… especially at our age

  3. Reply
    starla
    May 18, 2011 at 2:07 am

    equity is the difference between what your owe on your house and the actual value of your house. yes they use your home for the collateral for the loan. if you do not need the money do not get the loan.

  4. Reply
    mamaexfour
    May 18, 2011 at 2:13 am

    YEP!!!!!!!!!! Home equity is the differance of what your house is worth and how much you owe!! Get in touch with real estate atty or your local bank should be willing to explain it all to you!! Try not to use your equity to consolodate bills, use to do home improvments, which will add value to your home when ready to sell!!

  5. Reply
    Maria b
    May 18, 2011 at 2:28 am

    If you are doing well paying your mortgage don’t bother with another loan.

  6. Reply
    juno622
    May 18, 2011 at 2:53 am

    I suggest taking out a couple of those loans and go really, really deep into debt – then get married, have a couple of kids, then split with your wife’s sister.

  7. Reply
    ricks
    May 18, 2011 at 3:21 am

    An equity loan/line is the difference between the value of your home and what you owe on it:
    mortgage: $ 150k
    value: $ 225k
    equity:= $ 75k
    Yes, your home is the collateral, just as it is in your mortgage that you have. You can get into trouble if you are unable to make both payments on your home. Make sure that the loan (if you decide to get it) makes sense for you.

    Sounds like they are just trying to get a loan out of you just b/c you have a house through cold calling & mailers. If you are not seeking a loan or need one, you can throw away the letters & tell them they dont need to call you anymore.

  8. Reply
    Tony B
    May 18, 2011 at 3:28 am

    You will get those in the mail FOREVER! They are non-stop. Probably they are all legitimate offers. If you need money, go back to the bank where your mortgage is from.

  9. Reply
    SexyTrojan
    May 18, 2011 at 3:44 am

    Being a homeowner gives you a lot of financial power with your bank.

    Your house can be used as collateral to get loans and lines of credit (these are considered home equity loans/lines of credit because you are borrowing against the equity in your home).

    People get in trouble with these when they can’t afford the mortgage (and everything that goes with it) as well as the additional loan amount.

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