Equity Mortgages

Equity Mortgage is a type of mortgage for which your home is kept as collateral instead of any other asset such as property or car. It is similar to second mortgage loan in the sense that it affects the ownership of your home. The value of home equity is extracted by subtracting the current value of the house and the mortgage.

ADVANTAGES OF AN EQUITY MORTGAGE
• The major advantage of equity mortgage is its low rate of interest. Since your home is in the custody of the lender, there is less risk of your defaulting.
• The second major advantage is that regardless of the way money is used, the interest you pay on the first $100,000 you borrow is tax deductible. Credit cards and other types of non-secured loans do not have this tax benefit.
• In this case , you get cash when you need it since it works like a credit card does. You can pay bills or finance a home renovation project using this type of home equity loan.
• It gets you a fixed amount of money all at once if you need it to cover a number of expenses.
• It is easier to qualify for home equity loans even if you have bad credit since your house is pledged as collateral.

Equity Mortgage- Uses
It can be used for anything like debt consolidation, credit card bills, home renovation, car purchase, education, business investment, living expenses, etc. It can also be used for paying for medical expenses and emergencies or helping out a family member. You can also use these loans to finance the purchase of another house.