An equity loan, as the name implies, is a loan for which you use the equity in your home as collateral. You can make excellent use of your money by taking out an equity loan to purchase a California vacation home. You will get the same rates on an equity loan as you will on a fresh mortgage, or even lower rates. An equity loan, however, is a much quicker loan.

Beware, though, of equity loans with adjustable rates. In some cases, a bank gets the right to adjust the rate quarterly. You could wind up paying 11 percent very quickly on a loan that you believed carried a 6 percent rate. Go to your own bank first, then compare its rates with those of other lenders.

CREATIVE FINANCING
There are other ways to finance San Diego homes that probably have never entered your mind. When you want a personally tailored suit or dress, you might start at a department store, then discover you have better luck at a specialized clothing boutique. The same holds true for money. In recent years, there has been a revolution in the finance industry. Experts have developed creative financing for individual clients. Now, when you cannot find a mortgage tailored to your needs at a bank, you go to a reputable mortgage broker. And equity participation is yet another kind of creative financing that involves neither banks nor mortgage brokers.

WHEN TO USE A MORTGAGE BROKER

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