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.
People often need a source of credit for an important project that they have embarked on. This could be investing in shares, taking some further education courses or extending their home. By the very nature of these tasks, the money to finance them could be needed over an extended period and in varying amounts. Thus a source of credit is useful to fund these projects. This is where a home equity line of credit fits in. This article will discuss how a home equity line of credit works and some things to consider if you decide to take one out.If somebody owns a home or is paying a mortgage off for a property they may be eligible for a home equity loan line of credit.The principle behind the loan is that a lender will lender around 75-80% of the value of a property to the property owner. If the property is worth $100,000 and the owner has paid $50,000 of the mortgage, then the lender may lend the owner another 25-30% of the value of the property ($25,000 – $30,000).If the property owner decides to take a line of credit for this amount then the money can be drawn on over a period of time much like you might use a credit card. It is, in effect, saying that you have a credit card charged up to $25,000-30,000 that you can use however you see fit.Once again, it is important to stress that although it is like a credit card, the money should be used wisely. Ultimately, this money is secured by your property. If your spending gets out of hand and you can’t pay back the line of credit you could lose your house. Use the credit to add value to something or that has a high return on investment potential.If you decide to go for an home equity line of credit then it is important to look around at the best deals. In most cases you will get your line of credit with the mortgage company that you already have the mortgage with but you can negotiate a better deal if you know what other equity line of credit deals are around.One thing to consider is the home equity line of credit rates. This is the rate of interest you will be charged for using the credit. In most cases, if you have a variable rate home loan, you will be charged at this rate. If you have a fixed rate, then the interest rate on the line of credit will be worked out when you apply. This can be negotiated if you know that you can get a better deal elsewhere. The chances are that the lender will not want to lose your business so may meet you half way. The same goes for the additional costs. These could be arrangement fees and closing costs.Home equity line of credit loans are a flexible way to have access to a large amount of money (depending on the equity in your home) but always use the money prudently.
How many homeowners have you worked with in the past who seemed overwhelmed by the entire process? If you’re like most mortgage brokers or real estate agents, then you know quite a few. There are seemingly countless people who have bought homes who wish, several years later, that they had worked a bit harder or perhaps waited a bit longer to get the better mortgage rate or terms or points.Or perhaps there are those homeowners whose credit wasn’t quite where they would have liked it to be at the time of their application and were left with a rate that now seems unfair to them. They signed to paperwork, they’re locked in, but refinancing is always an option and right now could be the best time to encourage these homeowners to refinance to a better mortgage.Interest rates continue to remain at historic lowsOne of the major indicators that right now is the best time to refinance is that interests rates are at their lowest levels in history. There are individuals who are securing thirty-year mortgages for under five percent. If a homeowner can move from paying just over seven percent to around five, that would equal tens of thousands of dollars by the end of the mortgage term.At this point in time, no one really knows what the federal government will do with the interest rates in the coming year. Many ‘experts’ predicted that the rates would have increased by now and still the Fed is holding them at near zero percent for lenders. There are millions of homeowners who would benefit from refinancing their mortgages now thanks to these low interest rates.Credit score has improvedAnother major reason that now is a good time for homeowners to consider refinancing their mortgage is that their credit score will have likely increased since they purchased their home. This certainly isn’t for all homeowners, but those who may have missed payments, been slow with payments, or made other mistakes when trying to build their credit history prior to purchasing their home.A lower credit score will certainly affect the mortgage rate they receive and if they have managed to boost their credit score by twenty, thirty, fifty, or even one hundred points since they took out their mortgage, then now, with the low interest rates, is the perfect time to refinance their loan.Banks are hungry for positive businessPeople aren’t buying homes at the moment. There are a number of reasons for this, but with the housing crisis of the past few years, that has left many homes foreclosed. Banks are sitting on empty lots and dealing with increased competition for customers. That usually means that since demand is low, rates will be lower.A homeowner who is looking for a better mortgage rate will likely be able to find it with another financial institution, especially if they have already proven that, through this economic crisis and housing mess, they have been paying their mortgage on time every month. The business end of the industry is sitting in their favor.Many people are in a holding patternThere are many homeowners who are staying put with their homes and their mortgages. The value of their home may have dropped since they purchased, especially if they bought their home four or five years ago and they are merely waiting for the value to come back up. They may use this as a justifying reason why they aren’t willing to refinance right now, but it is precisely the reason that they should consider it.There has really never been a better time to refinance to a lower rate. If there’s room to make significant savings for the homeowner, then it may pay to encourage them to at least look into it.David