I definitely do not advocate taking out a second mortgage if at all possible. In my opinion, it's best to stay out of debt. However, there are those times when needs come up and you have to consider your options, and a home equity loan or second mortgage often provides the lowest interest rates compared to other options.
This collection of home equity calculators, bundled in a single Excel workbook, can be used to help answer some of the following questions:
1. How much can I borrow if I already have a mortgage and other loans?
2. What will my monthly payment be for a fixed-rate home equity loan?
3. How much can I save in interest if I make extra payments?
4. How long will it take to pay off my loan(s)?
5. Could I end up owing more than my home is worth if the value of my home drops?
6. What are the tax deductions from paying interest on my mortgage (if applicable)?
If you are trying to decide between a Home Equity Loan and a Home Equity Line of Credit, make sure you read this article.
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