Low Interest Rate Home Equity Loans
Posted at 1:36 am | Filed Under mortgage-financing-tips.info-part2-20
Before applying for a personal loan to pay for home repairs, wedding
expenses, or college tuition, carefully weigh the advantages and
disadvantages of a home equity loan. Home equity loans provide a lump sum of
quick cash for large purchases. Moreover, because your property secures
the loan, most second mortgage applications are approved.
Advantages of a Fixed Rate Home Equity Loan
Home equity loans are beneficial because they generally have a lower
interest rate. Using a credit card for home repairs, emergencies, etc is
very costly. Because of high finance charges, paying the balance on
credit cards is almost impossible. On the other hand, a home equity loan
has a low fixed rate, which allows you to pay off the balance within a
few years.
Furthermore, home equity loans are available for individuals with poor
credit. Most bank loans and credit card companies will not loan money
or grant credit to individuals with a low credit score. In some cases,
it is possible to obtain a loan with adequate collateral or a co-signer.
If a bad credit applicant does not secure the loan with a piece of
property or have a co-debtor, lenders will not approve the application.
Home Equity Loan Dangers
While low rate home equity loans have several advantages, there is one
major pitfall of getting a second mortgage. The loan approval is based
on your home’s equity. Hence, you take out a second loan against your
home. If you are unable to repay the home equity loan, the lender will
foreclose on your house. This is true even if you continue to pay your
first mortgage. Because the home has two liens, either lender has the
right to foreclose.
Finding Low Rate Home Equity Loans
Getting the best deal on a home equity loan requires work. To begin,
shop around for quotes from a mixture of lenders. These may include
banks, mortgage companies, brokers, credit unions, etc. Mortgage brokers
are extremely helpful. Moreover, contact your present mortgage lender for
a quote. Before applying for a second mortgage, review your credit.
Resolve credit errors, and improve credit blemishes. This will help you
get the best rate.
Here are our
Recommended Home Equity Loan Companies Online.
Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.
Clear Your Debts and Improve Your Lifestyle with a 2nd Mortgage Home Equity Loan
Posted at 1:05 am | Filed Under mortgage-financing-tips.info
Property Equity Explained
Equity in our home is simply the value of the property minus the total of the mortgage or mortgages outstanding that are secured against its value. When we first purchase the property the equity value will be fairly minimal unless we have had the good fortune to have been able to put down a fairly large deposit. As time goes by the amount of the mortgage will reduce as a result of the monthly repayments and hopefully, the value of the property will rise in line with market forces and inflation. By taking out a 2nd mortgage home equity loan we can release some of this equity.
What would we use a 2nd Mortgage Home Equity Loan for?
The 2nd mortgage home equity loan can be used for a variety of purposes. Buying, maintaining and refurbishing our property create a severe dent in our family budgets and this budget is most often held together by increasing short term debt e.g. credit cards. By using a 2nd mortgage home equity loan to repay these debts we can reduce our monthly expenditure (repayment of the 2nd mortgage will be over a longer period of time) and provide a good excess of income over expenditure to ease a tight family budget. Also, the interest rate on the 2nd mortgage, whilst being more expensive than our principle mortgage, will be far cheaper than the credit card debt and is also tax deductible.
College or continuing education costs for our children are not cheap and whilst we should have probably budgeted for this many years ago, the practicalities of life are rarely that easy. A 2nd mortgage home equity loan will enable you to cover these commitments and spread the cost over a period of time to enable them to be affordable.
Home refurbishment or extensions can be financed through a 2nd mortgage home equity loan and this will not only provide more comfortable living accommodation but it will add increased value to your property.
You may possibly be thinking of buying an additional property on an investment basis. The 2nd mortgage home equity loan can be used to cover the cost of the new property or as a vehicle to raise the down payment required.
You may be planning a dream vacation for a special anniversary that is coming up. Whilst this may be viewed as a somewhat frivolous one off expense and not provide added value in terms of an education, reducing interest rates, increasing property value etc., you may feel that given the hard work undertaken to get to the position you are in today, it may well be worthwhile using equity in your property for this purpose.
Whatever the reason you are considering a 2nd mortgage home equity loan, they are an easy and flexible product to take advantage of the value built up in your home.
If you need more information or resources to help research for a planned mortgage to perhaps consolidate your debts or looking for a 2nd Mortgage Refinance Loan, please visit our informative web site: Mortgages.
Click here to try our Free Mortgage Calculator.
Tags: 2nd mortgage, 2nd mortgage home equity loan, home equity loan, Mortgage Interest Rate, second mortgageDebt Consolidation Second Mortgage Loan Advantages and Disadvantages
Posted at 1:03 am | Filed Under mortgage-financing-tips.info
You may never be as popular as today’s second mortgage, but it could be your best friend. In today’s finance-friendly world, it seems like everyone is getting a second mortgage or home equity line of credit — and as interest rates climb, their popularity grows. Even so, you still need to ask yourself: what are the advantages and disadvantages? Time to do some homework - the kind of homework that could save you thousands of dollars.
“It’s not about loans; it’s about changing people’s lives for the better,” says Rory Cambra, president of the North San Diego County Chapter of the California Association of Mortgage Bankers and a mortgage banker with Pacific Capital Mortgage.
What is a second mortgage? Quite simply, it’s another mortgage on your home, and like the first, it’s secured against your property or the equity you’ve built up over the years. They can be fixed-rate or adjustable-rate.
So, what’s the difference between a second mortgage and a home equity line of credit?
“A second mortgage is a lump sum. A home equity line of credit is basically an open checkbook,” Cambra says. Lump sum loans are best when you need all the money at once.. A line of credit is best when your cash needs are stretched out over time, like a series of home improvements or college tuition payments.
Equity is the difference between your home’s value and the balance on your mortgage loan. If your home is worth $500,000 and you owe $400,000 on the mortgage, then you have $100,000 of equity.
“Americans have hundreds of billions of dollars in equity, but most don’t understand that the equity in their home is not safe, liquid or growing,” Cambra says. “Everything from market conditions to disasters can significantly affect your home equity. It could literally just go away.” Before you decide to jump in to the second mortgage waters, assess your family’s financial needs and goals; explore the variety of second mortgage products, and understand how each type best serves your financial picture. Then consider the following:
Second Mortgage Advantages (They increase the more homework you do)
Make your equity work for you. It’s a good thing to separate your equity from your mortgage and put it in a safe, liquid and growing environment. “You’re not doing it to conserve your equity; you’re doing it to create wealth. It can even be used to create your retirement nest egg,” Cambra says.
A cash cushion. Cambra tells his customers that the best first use for your second mortgage is creating a cash cushion, suggesting a minimum of $5,000 be put away for emergencies. Why? So you won’t turn to credit cards the next time an unforeseen financial need pops up.
Pay off debt.
A non-brainer: pay off all your high-interest debts, including credit cards.
Serious liquidity. You can create serious liquidity, like socking away one year’s salary in the bank. (We can dream, can’t we?) Pay for your child’s education. That sigh of relief you just uttered is reason enough.
Create wealth.
Consider this: If you use the proceeds from your second mortgage properly, you can - on paper — pay off your house in full. The key words being, “on paper.” Obviously, you don’t want to miss all the financial and tax benefits that go with your mortgage, but according to Cambra, creating wealth on a balance sheet that is equal to the amount you owe is an accountant’s dream.
2nd Mortgage Disadvantages (They decrease as you do more homework)
Dealing with fear and stress. Everyone has trepidations when it comes to property finances. Fear causes some homeowners back away from a second mortgage. But if you educate yourself, and are prudent with the proceeds, you really haven’t increased your risk.
Not protecting your home.
Be realistic about estimating your future income. If for some reason you cannot pay back the second loan, it could be disastrous. Consuming the proceeds of a second mortgage unwisely. Some homeowners use a second mortgage to take a lavish trip, buy that fantastic new car they’ve always wanted or spend it on frivolities. Then they end up going right back to their credit cards. “It’s a fact: we are human, and we are driven by the pleasures of the world - and those are usually depreciating assets,” Cambra says.
Second Mortgage Costs, Fees & Charges.
2nd mortgages have more defaults, so it’s common for lenders to charge more fees up front. Prepare for and budget the costs. You might also have appraisal fees, points, applications costs and other closing costs. Ask your lender - beforehand - for a printed list of fees.
David is a free-lance writer and media consultant based in Southern California. He also serves as spokesperson for high-profile businesses, political campaigns and community issues.
Please visit these helpful resource websites: To get a no cost rate quote for a 2nd mortgage please check out Second Mortgage Quotes. If you need more loan advice about refinancing with Bad Credit, take a look at Equity Loan Refinancing. For the latest debt consolidation solutions, please visit the Debt Consolidation Loan Center.
Tags: 2nd mortgage, debt consolidation loans, equity line of credit, home equity loans, rates, second mortgages