Financing College Studies with Home Equity Yorktown Heights NY

You need to understand the advantages and disadvantages of financing college studies with home equity in order to compare these loans with regular student loans in Yorktown Heights.

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Financing College Studies With Home Equity

Author: Melissa Kellett

It is possible to finance family member’s college studies with the equity on your home. However, you need to understand the advantages and disadvantages of doing so in order to compare these loans with regular  student loans so you can decide which option is the best for you and which loan best suits your needs and budget.

Home equity provides an incredible source of funds that can be good enough to finance college studies. With home equity loans you can get better loan terms due to the secured nature of these loans. Compared to unsecured student loans  , they provide a much better source of funds and incredibly better loan conditions.

Home Equity Loans

Home equity is the difference between the value of the property guaranteeing a loan and the outstanding debt that the asset is already being used as collateral for. For instance: if you have a property with a market value of $100,000 and a mortgage guaranteed by it with an outstanding balance of $45,000, this means that there is still $55,000 worth of equity left on your home. And this amount can be used to guarantee another loan with a similarly low interest rate.

Home equity loans have the lowest rates on the loan market only matched by home loans and subsidized loans that can be a little lower. Also, they have other advantageous terms like higher loan amounts, longer repayment programs that can reach up to 15 years or more and resulting lower monthly payments that make these loan incredibly affordable.

Home Equity Loans For Financing College Studies

You may wonder: why use a home equity loan as a student loan? The answer is rather simple: Home equity loans constitute one of the cheapest sources of funds on the loan market and also provide high loan amounts compared to all kind of loans. There are of course more suitable loan instruments for this purpose like subsidized student loans or federal student loans. However, when qualification for these loans is not possible, home equity loans are an excellent alternative that can result less onerous than regular private student loans.

Moreover, these loans can also be the perfect complement for federal loans when federal loans can’t provide enough money for financing all college expenses. Home equity loans provide higher loan amounts and thus can finance a whole career on their own. But if you get better loan terms on federal loans or private subsidized loans, you can supplement the funds provided by them with a small home equity loan so as to cover for any additional expenses.

Also, since these loans can provide longer repayment programs than the average student loan, you can thus obtain lower monthly payments that can make the loan repayment significantly more affordable. Moreover, parents can finance college studies and their children can afford the whole or part of the monthly payments with a part-time job without difficulties.

All these characteristics make home equity loans a good alternative when traditional financial sources for college studies are out of reach. Thus, they should be taken into consideration among the other options and pondered to see which alternative best suits your needs and budget.

About the Author:

Melissa Kellett is an expert loan consultant who has worked for twenty years in the financial industry and helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and many other types of loans and financial products. If you want to learn more about Unsecured Loans and Credit Card Debt Consolidation you can visit her site http://www.speedybadcreditloans.com/

Article Source: http://www.articlesbase.com/finance-articles/financing-college-studies-with-home-equity-952061.html