People may wonder how to repay their equity loans, since it appears to be a new start. However,
equity loans are often secondary loans that a borrow wins to payoff the current balance of the home.
Many lenders will offer equity loans extending the payments to “25-years” or longer in some
instances. The lengthiest loans are extended to around “35-years.”
Of course, most lenders will extend credit for the least amount of time, which is around 15 to 20
years. The short-term loans are more to your advantage, since the interest rates and mortgage
repayments work together to produce an affordable rate for sooner payoff.
One of the shortcomings of short-term loans is that the repayments are often steeper in order to repay
the loan amount on time. If during the term amount, you see that you can repay the debt sooner, you
may want to consider “re-mortgage” loans for a shorter payoff term. This sounds ludicrous, since
one would think refinancing would increase the time for payoff; however, the loan is flexible, which
means you can repay the mortgage off much sooner than expected in most instances. You may want
to note that the flexible loans against equity often do not have redemption penalties in the event you
pay off your home sooner.
In other words, if you have a pending loan, you may want to review the terms and conditions, since
the agreement may have penalties for paying off your home sooner than the agreed time. It pays to
review the terms first before considering an equity loan, since if you take out another loan and have
penalties on your pending loan, you will repay both the pending loan and the current loan; and thus
could possibly double the balance owed on your home.