Second Mortgage – Home Equity Vs Refinance

Why should you take out a second mortgage or a home equity line of credit instead of refinancing?Well…You Shouldn’t!Why Not?1. Second Mortgages usually have an interest rant that is twice or even three times as high as your first mortgage rate. You can refinance instead and keep a very low rate. In the long run a second mortgage will just cost you money in interest charges.2. Home equity lines of credit are designed for mortgage account executives (salespeople) to sell you on using it like a credit card attached to your home. They will try to convince you to use it over and over again.3. A refinance loan is better for the equity in your home. Very few companies will refinance your home at 100% of it’s value without forcing you to take out a second mortgage. You don’t want to use 100% of your equity because that means you no longer have that equity to fall back on in emergency situations.4. Second Mortgages and Home Equity lines of credit are designed to provide account executives (salespeople) with another tool to sway you into putting another commission in their pocket.5. Your equity is a precious thing and should not be used for unnecessary add ons or impulse buys. If you don’t need it and there is even a slight chance you can’t afford it, then don’t get a second mortgage to buy it.The only reason that I would ever recommend a second mortgage or a home equity line of credit is in an emergency situation. Only when there is no other option and you must take out a loan would I recommend either one of these options.

Home Equity Loans For People With Bad Credit

Most people believe having bad credit means you can never get a home loan. Not true! No matter what your credit rating is, their are mortgage lenders that will help you to get a home equity mortgage loan.Whether you’re looking to tap into the equity you’ve built up in your home, or refinance to a lower interest rate you can get a loan, even with bad credit.Many homeowners give up trying to get approved for a home loan to soon. With one easy online loan application you can have numerous home equity lenders competing for your business. When you apply online you have access to lenders for all credit types.A home equity loan can be used for just about anything – from paying off high interest credit cards to making home improvements. You can clean up old debts, and get on the road to a better credit rating.A fixed rate home equity loan will let you pay off all those credit cards in one shot, and leave you with just one low interest monthly payment you can manage.Renovations and remodeling are also good uses for a home equity loan, as they enhance the value of your property. Good uses include: landscaping, appliances, additions, new roof, energy efficient furnace and the like.Don’t let bad credit stop you from getting competitive loan quotes. There are lenders around the country who want your business, and will compete to have your business by offering the best deals possible on home loans.

When Is It A Good Time To Get A Home Equity Loan?

Home equity loans, like any other, should not be taken out for just any reason. Obviously, there are costs involved, and your equity cannot be built up overnight. There are certain conditions, though, that will make it more of a good time than others. Here are some things to look for to know when it might be time for you to get a home equity loan.When There Is A Real NeedEach of us, at some time or other, will have a real need for cash – lots of it. This could be the result of an emergency, medical bills, college expenses, sudden repair bills, debt consolidation, and more. The need here often cannot be foreseen, but you still need the money.For Home ProjectsWhen you have a home project that will cost a lot of money. This is probably one of the best investments you can make with the equity in your home. Home renovations or additions can add real value to your home – making it a wise choice. It also increases the equity even more – but you should know that not every project adds value. It is important to check with a Realtor or contractor to discover if it will increase the value in your area.It could even be a good way to get money to prepare your home for sale – especially if you know there will be some large expenses. By getting a home equity loan for the amount you need, with the lowest possible payments, you can save money, and pay it back as soon as the house is sold.Other Needs – Or WantsObviously, not everything could be listed here, but you may also have some other needs. You may have a need to buy another car. Other things, like some of the wants you may have could include a long vacation, a boat, a special trip, a snowmobile or jetskiis. You could even use the money as a down payment to buy a vacation home, too. Really, the sky is the limit – depending on how much money is available. You could even use it for multiple purchases.When The Conditions Are RightThe status of the market is not always such that good terms on loans are available. Interest rates fluctuate every day, and new kinds of home equity loans may offer better deals. If you watch the market some, then you can determine when it is a good time to apply for your home equity loan. If you are not sure exactly how much money you need (or want), you may want to consider getting a home equity line of credit (HELOC). This creates an account for you with a credit limit, and you draw out the money, as you need it. Since you only pay interest on what you actually use, it could work out especially well for your needs.Another thing to consider about the timing of a home equity loan is your own credit rating. Since this will form the basis of your terms, such as interest rate, amount, and time given to repay it, it is important that you make sure it is in the best possible condition first. You can help to improve your own credit rating by making sure your credit report is accurate, paying down your outstanding debt, and possibly destroying extra credit cards to reduce the amount of credit you have.Be sure to look around for a good deal first. There is a lot of difference between what one company offers and the next one. Find the best deal on your home equity loan, or HELOC, and go for it. Soon the money you need, or want, will be in your bank account.

Four Things To Watch For When You Get A Home Equity Line Of Credit

Home equity loans are a great way to get the cash you may need – for just about any reason. It could also be enough money to fulfill some of your dreams, too, if you have lived there for some time. Many people are tapping into their home equity in order to do some things they have always wanted to do. Still, though, there are some traps along the way that can be costly to those who are not watching. Here are four things to watch for when you get your home equity line of credit.What Is The Interest Rate?Probably one of the most important things that you need to watch for is the interest rate on the home equity line of credit (HELOC). This will mean that you need to watch the market some and be a little patient. Wait until you see that the interest rate is good. The interest rate may be near that of a first mortgage, but will often be a little higher.Besides the interest rate, though, there will also be what is called a margin. This is an interest rate that is added to the prime rate, and it remains on it for the life of the loan. This figure is variable with each lender, and they often will not reveal it unless they are asked. You need to ask, because this could, in some cases literally double the interest you will be required to pay.Is There A Guaranteed Conversion – If Necessary?Because a home equity line of credit is an adjustable rate loan, you will want to have the protection of being able to convert – if necessary. This means that if the prime rate becomes high, that you will be able to convert your now high interest loan to a fixed rate loan. Oftentimes, adjustable rate loans have no caps on the interest rates, or very limited control over the caps. Currently, there are only about two states that put a cap on it – of about 16 to 18%!What Charges Apply?A home equity loan can come with quite a few charges – or just a couple of them. It really is up to the lender and what they think they might be able to get away with. Many home equity lines of credit do not have any closing costs now, so look around to find one that does not.Other charges may include a charge per check that you write. Another is a charge that will be given you if after a certain period of time you have not withdrawn any more money – often referred to as an inactivity fee. Then there may be an annual fee, or a monthly fee for participation in the program.How Is It To Be Paid For – Amortized?Another thing that you must look into is to find out how the home equity line of credit
loan is to become amortized. You need to know how long is the draw period – the time that you have to withdraw the funds as you need them, and when you start paying on the principal of the loan. Some HELOC’s require a balloon payment for the full amount at the end of the draw period. This would require that you refinance the loan. Other plans require that you start making payments that will fully amortize the amount you borrowed, but the time period to do so may vary.As you can see, there are many different features given by different lenders. You want to make sure that you get several quotes when you go to apply for your home equity line of credit. Then carefully evaluate and compare them in order to find the features you like and that will fit your particular need for your equity.

How to Get a Miami Home Equity Line of Credit

Home equity lines are an extremely beneficial way of borrowing a loan, wherein one takes a loan against their Miami home. The home serves as security, against the loan amount. To have a home in a popular city like Miami is an added advantage. The lenders are assured that their credit is safe as Miami is a hot favorite with tourists from all over the world. The buyers too are assured of high returns on their investment, owing to the sound economy of Miami.Advantages Of Home EquityHome equity lines of credit have many advantages over a regular loan. It gives you the flexibility of borrowing a large sum of money according to your need. You can easily access the funds, as and when you need them. This way you and other Miami home owners can save money by paying interest only on the amount borrowed. Most of the times, the interest is also tax deductible, which means, you save more money.Home Equity Lines – Some DrawbacksHome equity lines also have some shortcomings. As this is not a fixed loan, the rate of interest can change anytime. Thus, the payments also change. Interest rates are high as compared to a fixed loan, but that is the price you pay for the flexible nature of this loan. This may make it difficult to refinance your first mortgage.You must also know that the amount that you can borrow on your Miami home is calculated in a certain way, which may differ marginally from lender to lender. A percentage (set at 75% to 80%) of the assessed value of the house is taken. From this amount your remaining dues in mortgage are deducted. The amount reached at, is the available line of credit for your Miami home. This available limit varies from one client to another in accordance with their capacity to pay back the loan.Before deciding to opt for home equity lines, you must ascertain whether the cost you are paying is well-worth it, in terms of the benefits that you are getting. The conditions laid down by the financial organization should fulfill all your requirements and at the same time, not pose excessive financial burden on you. If these things are not taken care of, you will fail to make your payments on time.Your Miami home is your most precious asset, don’t lose it.

The Advantages of a Manufactured Home Equity Loan

Also called a second mortgage a home equity loan is a good way to tap into the value you have built up in your manufactured home. These types of loans are normally capped at $100,000 but the main limiting factor is the amount of equity you have in your home. The interest is also tax deductible just like that of a first mortgage.Home equity loans come in two basic types; the fixed rate and the line of credit. The terms for both similar and are normally required to be paid off in 5 to 20 years. The loan will also need to be paid off if and when you sell your home.The main difference between these two types of loans is how they are paid out to the borrower.With a fixed rate home equity loan the borrower get a lump sum payment for the face value of the loan. The interest rate is fixed with set monthly payments that remain the same for the life of the loan.A line of credit usually has a variable interest rate and is set up to function in much the same way a pre-paid credit card works. In fact many lines of credit come with a credit card that allows the borrower to tap into the account whenever needed. Once the borrower starts using the money monthly payments will start and are based on the current interest rate and how much money was borrowed that month. Once the life term of the loan is up any outstanding balance must be paid in full.One advantage of getting a manufactured home equity loan is the ability to get a large amount of money in a short amount of time. This money can be used for a multitude of things including home improvement projects, paying off another loan, college tuition, and other expenses that come unexpectedly.One of the most common uses for a home equity loan is debt consolidation. By transferring all your debt to one loan you will have one monthly payment at a much lower interest rate then found on those nasty credit cards.These types of loans come with one danger; your home is the collateral and if for any reason you fall behind on or fail to make payments the lender can start foreclosure proceedings. This is why anyone considering using the equity in their home in this manner needs to thoroughly research and understand the terms of the offer the lender is making.Getting an equity loan on your manufactured home can be a good financial tool if it is used correctly. The advantages and disadvantages must be weighed carefully before making a final decision to determine if such a loan is right for you.

How To Make A Home Equity Line Of Credit Work For You

When it comes to getting money out of the equity in your home for that project, or expense, that you have, a home equity line of credit (HELOC) may be the best way to go. It gives you a number of options that other equity loans do not give, along with the flexibility of being able to make some choices. Here is how you can make a home equity line of credit work for you.A home equity line of credit is a second mortgage (in most cases), and as such, it will add another payment to your bills each month. This means that you need to be careful about how much you borrow. For this reason, you should determine how much of a payment you can afford each month so that it will not be a problem to come up with the money each month. You do not always want to let a lender determine this for you – they cannot lose whether you make the payment or not. Closing fees may or may not apply, but since many lenders have few fees for closing on a HELOC, you should look around and find one that does not.Once you are approved for the loan, you will have an account set up for you, which will have a credit limit. You will be issued either a credit card, or a check book, that gives you access to the funds. Many lenders who give home equity lines of credit require that you make an immediate withdrawal, and some will require each withdrawal after that to also be of a minimum amount.A home equity line of credit gives you the opportunity to withdraw as much money as you need – when you need it. There is also a draw period, which is a period of time that you are allowed to make withdrawals. This could be up to about 11 years – depending on your home equity line of credit terms.During the draw period, you will be paying the interest on the amount of money that you have used so far. The interest that you will be paying will most likely be calculated on a daily basis in order to keep current with your withdrawals. You need to be aware, though, that unless you opt to do otherwise, you are only paying the interest, which means that you will have 100% of the loan to pay during the amortization period – or as a balloon payment at the end of the draw period. If possible, you may want to pay down some of the principal, too, in order to have reduced payments later. You will want, however, to check with the lender to make sure that there is not any early payoff penalty.Certain fees may also apply to your HELOC. Some lenders will charge you with an account maintenance fee. This could result in a monthly charge, an annual charge – or both. There also may be a per withdrawal charge, and possibly even a no activity charge. Since a lender only makes money on a HELOC when you withdraw the money they do not want to see their money not being used – and earning interest for them. By looking around, however, you could find a home equity line of credit that does not have all of these charges associated with them.

Home Equity Line Of Credit

In order to qualify for a home equity line of credit, you must provide proof of income and proof of ownership. If you use a lender different from the one that holds your mortgage, you have to provide the details of the mortgage. Another appraisal has to be done on your home to determine its current value and for the lender to be able to compute the amount of equity you have.You have a term in which you can use and reuse the money, usually a 10 or 20 year period and after this, you have fixed payments on the outstanding balance and the interest. There are usually no closing costs associated with this type of loan, but you will probably have to pay an annual fee for the line of credit. The interest rate charged varies from one lender to another, but it is usually just a little above the prime lending rate – provided you have a good credit rating. The interest you pay may be tax deductible, but you will have to consult with a tax advisor to find this out.You can use a home equity line of credit to pay off your other bills and combine all your debts into one manageable monthly payment or make improvements to your home. You can also use the money to take a vacation, buy a car or a boat or have a nest egg for your retirement. There are many benefits to getting a home equity line of credit instead of a home equity loan. You spend years paying off your mortgage and increasing the value of your home, so why not take advantage of it? Most lenders have online sites where you can apply online and see exactly how much money you qualify for.

Advantages of a Manufactured Home Home Equity Loan

Often referred to as a second mortgage a manufactured home home equity loan gives the homeowner the option of borrowing money against the equity they have built up into their home. These types of loans allow the homeowner to borrow up to $100,000 and deduct the interest paid on their yearly tax returns.When considering a second mortgage there are two types to choose from; a fixed rate loan or a line of credit. Both of these loans will have terms that range from five to fifteen years and they must be paid in full if and when the house is sold.Let’s take a look at how these two types of loans work. First the fixed rate home equity loan allows the borrower to receive a lump sum payment for the amount loaned that can be used anyway the homeowner wishes. The monthly payments and interest rate remains the same during the life of the loan making this type of loan easier to budget for.A manufactured home equity line of credit works differently then a fixed rate loan. It normally comes with an adjustable or variable interest rate meaning that the rate is tied to daily fluctuations of the rates banks charge. The borrower is approved for a certain amount that can be accessed with either a bank provided credit card or special checks tied to the loan account.The monthly payment is a little different with a line of credit equity loan. It is dependent on how much of the loan amount has been used and the current interest rate. This means the monthly payment can vary and needs to be accounted for in the monthly budget. It is also important to understand that when the term of the loan is up all outstanding balances must be paid in full.One of the big advantages of a manufactured home home equity loan is the homeowner’s ability to get a large amount of cash fairly quickly. This money can be used to pay down debt, tuition, home improvement or remodel projects, a once in a lifetime vacation, or other unexpected expenses.Another advantage of this type of loan is the interest rate. It is normally lower then other types of loans and the interest that credit cards charge. By paying off outstanding balances on credit cards using a home equity loan the borrower can consolidate their debt into one monthly payment with tax deductible interest.A manufactured home home equity loan can be a good financial tool for homeowners who need a large infusion of money at low interest rates. It is important to weight the advantages and disadvantages before signing the closing papers to make sure this is the best choice to make.

Home Equity Loan For Bad Credit – Guarantors Do Help

Guarantors on home equity loan for bad credit are for borrowers who have negative credit report. If one borrower has bad credit, the lending company will certainly ask the home buyer to agree in providing a guarantor. The borrower would need to look for a co signer to back his claims that he can pay back the equity home loan as agreed upon.If you require a co signer, you have to realize that if you do not meet the loan payments, then your guarantor will be the one to pay for your monthly dues. Remember that the guarantor promised that he will assume the payment responsibility if you fail to fulfill it. Therefore you have to make sure that you do not fail in your payment responsibilities in order not to place any burden on your co signer.Co signers or guarantors are usually members of the family or friends. If a guarantor is required, the lending company will consider both your income as well as the income of the co signer when factoring in the loan costs. Hence, you have to expect higher amounts in repayment and overall rates. Likewise, a number of lenders will consider certain circumstances and will try seeking out less repayments and rates of interest on your behalf.On the other hand, if you apply for a home equity loan with bad credit together with a co signer, but he lack the sufficient income that can satisfy the contract, your application will be subjected to outright rejection, if not a substantial investigation that will determine if your own income will suffice.An important advice to a prospective guarantor is to really think it over before agreeing to become a co signer for a home equity loan with bad credit. He must remember if the borrower fails to meet payments, he will definitely be responsible for the repayment himself.