The loans can be used to eliminate the need for private mortgage insurance . Alternatively, a buyer of an expensive home can use one to eliminate the need for a jumbo mortgage by reducing the first mortgage to the conventional limit. Electronic payments Customers who agree to have payments to their lender electronically can sometimes get an interest rate discount. The value of a homeowner's unencumbered interest in real estate. Equity is the difference between the home's fair market value and the unpaid principal balance of the mortgage and any liens .
Equity increases as the mortgage is paid down or as the property appreciates in value.
The likely selling price of a home. In a mortgage or a home equity loan , fair market value is often determined by appraisal . This law requires lenders to inform a borrower about the terms of a loan, including a home equity loan , at the time a borrower is given an application. Lenders must disclose the A PR and payment terms and must inform borrowers what will be charged to open or use the account. Lenders also must explain if a loan includes a variable rate .