Home equity interest rates can be confusing for some people. In fact, if the wrong type of loan is taken out, homeowners can easily find themselves in financial trouble. With the current housing market mess, it is wise to understand how these interest rates work and how much they will cost you during the life of your loan.

The good news is that interest rates are a very helpful tool when homeowners are shopping for equity loans. Of the many terms that are associated with home loans, APR is one of the most important. APR stands for Annual Percentage Rate.

It should be understood that you cannot compare the APR between an equity line of credit and a home loan. These are two different types of loans and they behave differently.

Homeowners should also understand that an introductory rate is often used by lenders to get new business. If your loan has an introductory rate make sure you understand what the true rate will be once the first phase or introductory phase is over.

There is a difference between the standard interest rate and the annual percentage rate. The interest rate for home equity loans does not correctly tell you the true cost of the loan because it does not account for added costs such as points and fees. The APR is far more helpful when you are comparing two home loans because it accurately reflects the cost of credit expressed as a yearly rate. It will also include the interest rate and all fees and points that must be paid.

When you are trying to compare APR’s between different loans, make sure that the terms and conditions of the loans are the same. Differences in the terms and conditions will affect the APR. As an example, if one of the loans that you are looking at has a longer payment term, a balloon payment, and some type of pre-payment penalty, it is not meaningful to compare its APR to another home equity loan that does not have those conditions.

Another confusing aspect of home loans is the difference between equity loans and lines of credit. Consumers will do well to compare APR’s on home equity loans, but they should understand that they cannot compare this to lines of credit loans. This is because the annual percentage rate for an equity loan takes into account the interest rate and all fees paid within the loan, while the APR for an equity line of credit only takes into account the interest rate. In other words, the fees in a line of credit are not factored into the APR. To avoid confusion, consumers should only compare like to like; the APR of a home credit line loan should only be compared to the APR of another home line of credit that contains similar terms.

As mentioned above, home equity lines of credit may offer an introductory interest rate to get your attention. These introductory rates are also called discounted rates or teaser rates. It is important to know in advance how long the rate will apply and how much additional interest you will have to pay once it is over. In some cases, the added interest can be significant, in which case you may want to continue shopping.

Divorce can be an emotional time for anyone, but when credit problems are also a part of the process, the stress can be overwhelming. At issue during some divorce proceedings are the types of credit accounts that are open, either jointly or separately, and who has to pay which ones.

On a very general level, there are two kinds of credit accounts. There are individual credit accounts and then there are joint credit accounts. Knowing how each works can save you money and perhaps some hardships later on.

Normally, when you fill out an application for credit, and this can be for any type of credit from auto loans to home loans, the application will ask if you want an individual account or a joint account.

When decide on an individual account only your income, credit history, and assets are taken into account. By that same token, only you are held responsible for paying the loan back. It does not matter if you are married or single, you will be held responsible for the loan payments. Under this type of agreement, you may elect to add someone to the account as an authorized user, which means they can charge on the account, but that does not release you from sole responsibility for the account.

An exception to this is if you live in community property state. These states are currently: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states both you and your spouse may be held responsible for any debts incurred during your marriage, and the individual debts of one spouse may show up on the credit report of the other and vice versa.

With a joint account, your income, assets, and credit history along with your spouse’s are both considered when lenders decide to give or deny a loan. You are both responsible for the debt. The up side to a joint account is it often gives you and your spouse a better looking financial picture, especially if you have two incomes.

The down side to a joint account is that because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Many consumers do not know it but former spouses who run up credit bills and do not pay those bills can harm their ex-partner’s credit history on jointly-held accounts.

If you or your spouse is considering divorce or separation, you should both pay special attention to the status of your credit accounts. During the proceedings, it is important that the bills be paid on time because to ignore them may hurt your future credit as well as your spouse’s future credit. It is very important to remember that as long as there is money owed on an account you and your spouse are responsible for paying it.

When a divorce takes place, it usually best to close joint accounts or accounts in which your former spouse was an authorized user. This is the best way to avoid future problems should your spouse decide to use the account.

You should also know that by law, a creditor cannot close a joint account because of a divorce, but can do so at the request of either spouse. A creditor is not required to change joint accounts to individual accounts. The creditor can require you to reapply on an individual basis and then extend or deny you credit based on the new information that you give about yourself.Peter Kenny is a writer for The Thrifty Scot, please visit us at Debt Management and Bad Credit Remortgage
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Some of the most powerful tools on the Internet today are the various debt calculators. Yet, it can be surprising to learn just how few consumers actually use them. Debt calculators are exactly what they sound like. They are online calculators that can help consumers better understand their loans. The nifty part about them is that they can do a lot of various chores for those who use them.

There are debt calculators that are designed to work on simple loans. With these debt calculators you simply input the amount of money that you want to borrow, the interest rate that is being charged for the money, and the length (usually in months) of the loan. The tool will then return to you what the payment would be for that particular loan. The interesting and useful part of this is that you can input various rates, amounts, and term lengths to get a much better sense of your possible outcomes.

Debt calculators can be used for a variety of loan types. These include auto loans, cash loans, and even home loans. The more complex the loan, however, the more robust the debt calculator needs to be. Thankfully, that is not a problem. In fact, there are many online calculators that are designed to answer specific questions for you.

For example, under the home mortgage calculators that are available, you can find calculators that will help you determine just how much house you can afford. There are others that will help you decide if you should rent or buy. Others can help you better understand the long term issues of amortization.

Some of the most popular are those that help consumers understand closing costs when they are planning to buy a home. There are also many useful debt calculators that can help consumers with understanding refinance issues.

For those planning on buying a home in the near future, some of the most powerful and useful debt calculators are geared up to help with mortgage type information. In other words, there are debt calculators that can show you how an adjustable rate mortgage will work out and then compare that to what a fixed rate mortgage would work out to. This kind of information can be invaluable when looking for a home loan. The best part is that you do the work on your own time and there is no pressure to move toward one type of loan over the other. Debt calculators are impersonal. You put in the data and it returns an answer.

There are other types of debt calculators available as well. Some of these, as mentioned above, can help you decide on a car loan. Some can help you understand the monetary difference between buying a car and leasing the same car. Again, the information that you get back is impersonal and the final decision as to what will work best for you is up to you.

Debt calculators are a great way to get the inside information that consumers need in order to make intelligent decisions. Most of these are free to use and come with detailed instructions.Peter Kenny is a writer for The Thrifty Scot, please visit us at Cheap Mortgages and Compare Loans
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Loan comparison shopping is something that people once never considered. They would go their neighbourhood bank and assume they were getting the best deal in town. However, things have changed! For those who are new to the loan game, they may think that there are only one or two different types of loans which are available to them.

Although this may make things a lot simpler in the long run, this is not the case. In fact, having a large amount of loan options available opens up the opportunity for future borrowers to find the perfect loan to suit their needs.

When shopping for a loan, borrowers should look for a few different items when comparing loan options to find the best one. In fact, credit scores will allow for loan comparison shopping by not penalizing you for credit checks within two weeks of each other.

Interest Rate Offerings

A very important item to consider when shopping for a loan relates to interest rates. Interest rates will be offered at various percentages depending on the lender, the type of loan and the loan terms. In addition, one can obtain a loan with a fixed interest rate or an adjustable interest rate.

The fixed rate remains the same during the term of the loan whereas the adjustable rate will fluctuate throughout the term of the loan in accordance with the market. One may also find that lenders will offer them favourable interest rates if they have better credit as opposed to the rates which are offered to borrowers with a sketchy credit history.

General or Specialty Loans

One should also consider for what purpose they are obtaining their loan. Lenders will offer both general loans and specialty loans to the clients. General loans are basically loans where no set purpose is attached to the loan and the individual is borrowing money simply because they need it in general.

As for specialty loans, loans such as home loans and car loans are loans with an intended purpose. In other words, the money is going to be used for a specific purchase or purchases. It is important to consider the uses of the loan money as one may be able to get a better deal with one type of loan than another.

Prepayment Penalties

Borrowers should also check their loan documents and ask the lender if the loan carries any prepayment penalties with it. Prepayment penalties basically charge an amount to the borrower should they pay off the loan or transfer the balance of the loan prior to the end of the loan term.

This can often be a hefty percentage rate which is basically lost money should the individual decide to terminate the loan before it expires.

Since many lenders offer loans without prepayment penalties, it is wise to shop around for loans which do not have these attached to them as it shackles the borrower to the loan for the entire term if they do not want to have to pay a penalty fee to get out of the loan early.James Copper is a writer for http://www.any-loans.co.uk where you can find out about loan comparison