No Cost Home Equity Loan
A no-cost home equity loan allows a homeowner to take out a loan by borrowing against the equity in her home without having to pay the typical closing costs associated with home mortgages and home equity loans.
Closing costs typically include fees for appraisals, titles, lawyers, and related expenses. The major benefit of a no-cost home equity loan, and all home equity loans, is that a homeowner can often access a large amount of money at a low, tax-deductible interest rate with little or no upfront costs.
No Cost Home Equity Loan Drawbacks
Before considering a no-cost home equity loan or line of credit, a homeowner should read the fine print.
Often a lender will absorb the closing costs of loan but will charge a termination fee if the equity loan is paid off early. Other no cost home equity loans may have a slightly higher interest rate than home equity loans that do charge closing costs.
Homeowners who plan on using the home equity loan over a long period may be better of with a loan that has closing costs but a lower interest rate.