Following is terminology you will want to become familiar with when applying for a home loan:
When you are in the market for a home loan it's suggested that you obtain a copy of your credit report to ensure that there are no surprises. If any errors appear on your credit report you should have them corrected prior to applying for a loan. Because information may differ between the three major credit bureaus, a 3-bureau merged report is recommended.
the internet you can search for the best loan rates any time you'd
in a secure, confidential and usually free environment. We recommend
multiple mortgage loan quotes to allow you to shop for the
Home Equity Loans
One of the most popular types of loans today is a home equity loan, also called a second mortgage, wherein your home is used as collateral. Many companies now offer free, no-obligation home equity loan rates online. The benefit to this type of loan compared to various other loans is the tax advantages. The interest you pay on second mortgages is tax-deductible up to $100,000. By contrast, you get no deduction at all for interest paid on credit card debt, auto loans, many student loans or personal loans.
A traditional second mortgage works just like a first. You borrow a lump sum of money and pay back over a fixed term, usually 7 to 15 years. The interest rate may be fixed or variable.
Many people have chosen to use a slightly different type of second mortgage - a home equity line of credit. Instead of borrowing a fixed amount of money, you arrange for a fixed amount of borrowing power (minimum: $5,000 to $10,000; maximum: $100,000 to $250,000), available over the next 5 to 10 years. During that time you can take a loan anytime you want, with no further approval from the bank.
Different lenders provide different methods for you to access your credit. You might use a special check, put down a credit or debit card, attach the credit line to you regular checking account, or make a phone call asking that the funds be transferred into your account. You pay interest only on the money that you actually use, at a variable rate.
lines are offered by commercial and mortgage banks, S&Ls, credit unions,
consumer-credit companies, finance companies, even some large brokerage
houses. Credit unions often have the best terms while finance companies
generally have the worst.