California Equity Home Home Improvement Loan Loan Refinance
Thu, 04 Mar 2010 10:12:34 +0000
Easy is quitting your job when you win the lottery or when you retire comfortably into the sunset! Hard, is the state of the general consumer in this ever confounding maze of financial demands placed upon us. Nonetheless, monetary strains will always create major demands for notes like the home equity loan, and analyzing this loan prior to obtaining it, is always indicated.
We all want to have stability in our bank accounts and life in general but balance is obviously becoming some sort of commodity and so many of us lack it in many aspects of our lives!
With that said, when we turn for relief from financial stress, we often look into one of our greatest assets, our house. As solid as the foundation on a new home, your equity is always there for you to tap into when times arise for extraction.
Home equity pros and cons though need to be analyzed prior to your acquisition because this note can be really helpful to some and very hurtful in the wrong hands! First, your rates on an equity loan are much cheaper than credit card rates and many times substantially lower.
Your rates are fixed so the lump sum you borrow has a rate that never changes via being locked at closing time. You can actually make money (a lot) if you select the right home improvements to invest your loan into. Usually, these are plumbing, landscaping, bathroom, and kitchen remodeling. Your home equity loan interest can be tax deductible but only on a percentage and not for every dollar.
Cons associated would be keeping yourself from utilizing the money for purposes other than what it was intended from the outset! Using it on investments that have depreciation rather than appreciation can hurt your monetary landscape. Expect not to be allowed to rent out your home as many lenders frown on this and fully disallow it in the terms of the agreement.
Regardless of your money situation, you can see that this loan can do wonders for your life and put you in a much better financial position overall. However, if you don’t have a genuine need in mind, or have problems with allocating funds appropriately, you may want to pass on this note altogether!
Take a moment to find where the best home equity loan lenders are online. Go to http://home-equity-loan.valueprep.com for the most solid choices available to you now!
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Home Equity Loan FAQ:
Question: Can a mortgage on the house be payed off by home equity loan?
Is it possible to pay off the mortgage with an home equity loan if the APR is less than what I am paying right now? I understand that if I refinance, there are closing costs and for home equity loan, there are none, am I correct? What are the advantages and disadvantages of doing that?
Answer: It depends on the rate you are paying now and how long you are keeping the house . The disadvantage is that home equity loans can go up to a point where you will be paying much more than you are paying now .
Question: Home Equity Loan…advice needed.
I am in need of a Home Equity Loan. Does it make sense to approach my current mortgage lender? Or my bank? or a different third party altogether? Any advice out there is appreciated. My credit is not great and I need to know who would be most flexible with me.
Answer: No way to tell. You should contact them all.
Question: Are a Home Equity loan and a 2nd mortgage the same thing?
Answer: No, a Home Equity is one type of 2nd mortgage, but there are many types of second mortgages.
Question: If I have a home equity loan, can I refinance my 1st mortgage or do I have to refinance both?
Answer: You may refinance the 1st mortgage only, however you must request and get permission from the second mortgage or home equity line of credit (HELOC). This is called a subordinate agreement from the 2nd mortgage or HELOC agreeing to stay in the second position. Your escrow officer will request this along with the title company.
Most individuals that refinance their mortgage normally would refinance both the first and second mortgage (HELOC). This normally is more beneficial to the homeowner as in most cases the interest rate is lower on the refinance.
Question: I recently lost my home to a foreclosure, with an existing home equity loan that I may also default on.
My home equity loan is at 15% and I’ll never be able to pay it off. Since Ive already lost my home, does it make sense to just walk away from the equity loan? Perhaps negotiate a settlement? Hire an attorney? Anyone have any experience here?
Answer: Probably checking into a bankruptcy attorney would be a good idea, many give a free consultation and if you have other debt as well, it is possible an attorney could try to negotiate some sort of settlement on your behalf instead of filing bankruptcy. Bankruptcy stays on your credit for 10 years so you might try an attorney first.
Question: Does Bankruptcy chapter 7 allow me not to repay the home equity loan if there is no equity in it?
I do have a house and pay mortgage (current). I am going to keep a house if file for a bankruptcy. On the other hand I do have an equity loan (secured by my house) from the lender other than my mortgage lender. My question is can I claim equity loan ($100,000) as unsecured – and so dischargable debt as there is no equity in my home and appraisal only showing about 250,000 value, but mortgage is 500,000.
Answer: No. The equity loan IS secured. If you stop paying, the lender will foreclose. Period. Then the lender will come after you for the balance – then it would be time to declare BK. Talk with a lawyer.
Question: Can a 203K Loan be used to renovate my home I currently own or is it strictly for a new purchased home?
My home is 13 yrs old and I need more space. I want to add 2 bedrooms and 2 baths. I’m hearing it is cheaper to go out into the back yard with the addition rather than going up. I am pre-approved for a home equity loan but wondered if the 203K would allow for more money for the renovation.
Answer: FHA’s Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. Find out more about the Streamlined 203(k) program by reading HUD Mortgagee Letter 2005-50, enhancements to “Streamlined (K)” Limited Repair Program.
Question: Will I be granted a equity loan directly after purchasing the home?
I am going to buy a house this year and found a fixer-upper that makes my heart melt, but I expect to qualify for about 150k. The house I want is listed for 150K. It’s estimated value is about twice that, but is listed so low due to excessive damages. In an ideal world, I would try to get a loan for 200k, and use the excess to make the home livable. However, I don’t expect to qualify for that much (Due to my income level. My credit rating, debt, etc are great). Can I buy the loan for 150k, then turn around and get an equity loan (for maybe 50k) to clean the home up?
Answer: No, you can’t. The problem you are going to have is that a home equity loan is secured by the value of the house that is over the value of the loan. When you buy the house at 150, that is going to be the assumed value of the house (or else why would the owner sell for that versus waiting for someone else to pay more?). So there is no equity in the house for you to borrow against.
I will also point out that most lenders are going to want some sort of downpayment. So you may be able to get a loan against however much you put in for that, since that is equity in the home.
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