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how does a home equity loan get paid back?

by dave5s_402_517 from Marlton, New Jersey. Jan 2nd 2012 Reply


Certified Funding (INFO@CFCMortgageonline.com)
#41 ranked lender in New Jersey - 53 contributions

A home equity loan is a revolving account. It is most likely interest only and the payment is calculated on the outstanding balance. You need to pay more than the interest payment ever month, to pay down the on the principle.What is your mortgage rate on your 1st mortgage? The best way to pay the Home equity loan off is cash out refinance into a historical low 30 y fixed. Certified funding is a local NJ based mortgage company. 732 606 4433

Jan 2nd 2012
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Richard Woodward (RichardWoodward)
#39 ranked lender in Texas - 106 contributions

You can pay the the equity loan back by making normal payments. If you loan is an interest only loan you will need to pay more than the minimum monthly payment. You may also request from your lender to convert your loan to a fixed rate with a defined term. As another lender suggested, it might make sense to combine your first mortgage and your second mortgage into one new lower rate mortgage. If you decide to go with this option you would need to make sure the benefits out wiegh the cost. Contact a professional lender and ask them to help you.

Jan 2nd 2012
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Ron Wohlfarth (RonWohlfarth)
#34 ranked lender in New Jersey - 65 contributions

Yes I agree with both answers that have been submitted...Should you have any additional questions, concerns or thoughts, please contact us...Money@Ronwohlfarth.comwww.RonWohlfarth.com856-853-1234Thank you Ron

Jan 2nd 2012
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 1,963 contributions

The simple answer is by making payments to the principal balance. You can think of most equity lines as sort of a big Credit Card secured by your home. Each month you get a bill for the interest that the bank earned for the previous month. Every Equity line has an "Open" period and a "Payback" period. During the open period, which typically runs for the first 5 or 10 years, you borrow as much as you want, up to your limit, and only have to pay the interest the bank earns. Once you reach your Payback period, your payments increase so that you are paying back principal as well as the interest. The principal portion will be large enough to pay off the balance in the time remaining on the note. If you have an equity line and don't know when your payback period begins, and what the payments will be when that starts, you need to contact the bank and have them explain it to you so you can be prepared.

Jan 2nd 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

If you have a home equity loan and you're wondering, just check the paperwork you signed when you got it.. Most home equity loans operate under the same guidelines. In fact, they are called Home Equity Lines of Credit. For the first period, usually first 10 years, it's a revolving line of credit. Just like a credit card you can use it at your will up to your maximum approved amount. Then after the first period, it converts to an amortized loan. You are not longer able to charge anything on it, and your payments will now include payments to the principal as well as interest. Your payments will still adjust every year depending on current interest rates. If you're not sure about your terms, contact your lender... they will send you copies of your paperwork. WilliamAcres.com

Jan 3rd 2012
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