2pare different types of home equity loans. There are two main types of home equity loans: fixed-rate loans and variable-rate money. Fixed-rate money provides a fixed focus rate and monthly payment for the entire loan term, which can range from 5 to 30 years. Variable-rate finance are interested rates that can change periodically based on an index, such as the prime rate or LIBOR, plus a margin. The monthly payment can also vary depending on the interest rate changes. Variable-rate loans usually have lower initial interest rates than fixed-rate loans, but they also carry more risk of rate increases and payment fluctuations. Some variable-rate loans have a cap about how far the rate can change over the life of the loan, while others do not. You should compare the apr (APR) of different loans, which reflects the total cost out-of borrowing from the bank, including interest and fees. Continue reading »
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