Fixed Rate Home Equity Loans, For Bad Credit

Online, September 12, 2009 (Newswire.com) - As the owner of your own home, you have a very important resource available to help you weather many financial storms including the current global credit crisis. With the credit crunch in the news on a daily basis, it is a good time to take a look at the flood of equity in your biggest asset - your home. A home equity loan or home equity line of credit (HELOC) is a loan that is granted in principle, with the value of your house as collateral. The amount of the loan depends on the difference between your current mortgage value and the current value of your home.

A fixed rate home equity loan is a good way to liberate extra cash you for a variety of purposes, including debt consolidation, use of wealth creation through good solid investment of capital,ducation, home improvement, etc.

But before you decide on a fixed rate home equity loan or a variable rate home equity loan their best to compare the advantages and disadvantages of each type that you can make the right decision for you.

Using your home equity loans as one of the greatest long-term financial decisions that will make you its best to get the decision right from the start. Getting it wrong could literally cost thousands.

The question is whether to consider fixed-rate home equity loan or a variable rate home equity loans.

Fixed rate home equity loans

A fixed rate home equity loan is a loan where the interest is fixed and thus the repayment of a certain interest rate for a certain time. The period varies but can be anything from two to five years to increase the length of the loan. The professionals at a fixed rate home equity loan are:

* They provide certainty with respect to payments

* You can budget easily if you chose a fixed rate mortgage

* Even if the interest rate rises, your payments remain stable

Cons yield of a home-equity loans are:

* Your payments do not decrease if the sales fall

* You can not have the advantages of the market ups and downs

* Initial rates on the fixed-rate mortgages are usually higher than that deals with a variable interest rate.

A fixed rate home equity loans can cap your payments and make it easier for the household. The best time to be taking advantage of a fixed rate home equity loan if prices dip a bit. Then you can refinance your home equity loans with a fixed rate home equity loans and take advantage of the fact that interest rates will rise.

Variable rate home equity loans

Unlike fixed rate home equity loan, the interest on a variable rate home equity loan is changing all the time. This means that if interest rates rise, it helps your home equity loan repayment.

The pros to this type of home equity loans is that if interest rates fall, so does your repayments, but unlike fixed rate home equity loans, it is very difficult to budget for payments which fluctuate. This species is, however, allow you to take advantage of changing market conditions.

If the current prices are high, then its best to go for a loan with variable rates and when prices fall, to try to change it for fixed-rate home equity loan.

Aaden Marsh is Advisor of Home Equity Loans Australia.For any information regarding Home Equity loans, home equity loans for pensioners visit http://www.homeequityloansau.com