equity loan Equity is the term that is given to the portion of the value of your property that you actually "own". It is calculated by subtracting the amount you owe on a property from its current value. Home equity loans allow home owners to borrow back some of this equity for other purposes. A large umber of Australians have used the equity in their home to discover their financial freedom and so can you. Ask one of Absolute Finance Solutions mortgage broker how we can help you achieve your financial freedom. What is a home equity loan? Home equity loans allow borrowers to borrow money against the equity they have accumulated in their home. Over the last few years, property prices around the country are going through the roof and home owners have seen substantial increases in the value of their property. This means they have increased equity even if they have not finish paying off their mortgage. How a home equity loan works Generally, there are two types of home equity loan. One of which is a term loan whereby you are given access to a lump sum which you can use to make additional purchases. This is a good option when you have a more expensive loan you wish to payoff or there is a particular purchase you have in mind. You have the option of making interest or principle and interest payments at your discretion. If you are looking to purchase an investment property, speak to your accountant to ensure you are maximizing your tax benefits. The second type of equity loan is a line of credit, which functions as a private overdraft account whereby you are able to borrow up to a maximum pre-approved amount. Your credit limit will depend on a number of factors but generally ranges from 65 to 95 per cent of the value of the property offered as security. The many uses of an equity loan An equity loan can be used for different purposes. Some people use an equity loan for investment, debt consolidation or lifestyle. Using the equity in your home has several advantages over taking out a new loan. While many people use an equity loan to fund a holiday or a new car, many others prefer to use these funds more constructively by directing money into various investments, including shares, property or other speculative endeavours. One major advantage of equity loans is in the arena of debt consolidation. Instead of having a personal loan, credit cards, a car loan or a highly geared share portfolio, it's possible to combine all these debts into an equity loan with lower interest and lower repayments. It should be noted, however, that replacing a higher interest rate loan with a lower interest rate loan with a much longer term can be a very expensive option unless you are prepared to make more than the minimum repayments each month. Register And Use Our Loan Calculators And Investment Tools Absolutely Free!!! Subscribe To Our Free Monthly Newsletter!!! Make An Appointment With Us Today!!! | 
