IntroductionIt's amazing how many people get confused between a second mortgage and a home equity loan. For all intents and purposes they are one and the same.The amount that can be borrowed on a second mortgage is based on the difference between your home's current value and the outstanding principal balance on your first mortgage - this is known as your 'equity' - starting to sound familiar? Additionally in the U.S. the interest paid on a second mortgage is normally tax deductible.So why the confusion? Well, its the 'amount' that the loan is taken out for. The main difference is that a home equity loan can also be used like a line of credit. You can borrow as much or as little as you want up to the agreed amount between you and the lender. The second mortgage on the other hand, is for an agreed amount at the outset. Second Mortgage and Home Equity FactsA major similarity between a second mortgage and a home equity loan is the necessity for a good credit standing. The reason is that … [Read more...] about Second Mortgage vs Home Equity – Facts You Should Know!
Mortgage vs home loan
If you are a homeowner in need of an equity loan, but do not wish to refinance your existing mortgage, you have the choice of an equity line of credit or a second mortgage loan. Each option has advantages and disadvantages over the other. Here are several suggestions to help you decide which home equity loan type is right for you.Home equity loans come in two flavors: second mortgage loans and home equity lines of credit. Depending on your reasons for borrowing and the amount you need for the loan, choosing the right home equity loan for your situation could save you thousands of dollars. Here are the pros and cons of both loan types.Equity Lines of CreditChoosing a Home Equity Line of Credit, or HELOC, gives you the greatest amount of flexibility. If you are using equity for renovations to your home, an equity line of credit offers the flexibility to make sure the job gets done. Home improvements and renovations rarely come in under budget; if you only planned for a fixed amount … [Read more...] about Second Mortgage vs. Home Equity Line of Credit: Which is the Best Choice?
100% Mortgages vs. 10% down: Loan ComparisonAre 100% mortgages or 80/20s a good idea? Are they even available anymore? Yes and Yes.Can I do an 80/20 to avoid PMI. Yes again.Any licensed mortgage person can do a home loan, but it's how the mortgage is constructed or designed that's important. After you close, you're the one making the home loan payment so it's important to look at several things: rate, payment, closing costs-but I'll go one step further. Ask yourself "how will this home loan help me accomplish my broader financial goals?"In this post, let's explore the question "how much is the right amount to put down on a home loan."100% mortgages or 80/20 home loans are only a good idea if you use the money you'd normally put down on a home-towards something better. For example, I helped a client get a 80/20 mortgage who chose to improve the property with his 10% down payment. Instead of coming to closing with 10%-he came in with $0-now the improvements on his home have increased the … [Read more...] about Are 100% Mortgages a Good Idea? Can You Even Get a Texas 100% Or 80/20 Home Loan Anymore?
Many home owners have the need for extra cash to complete home improvement projects, pay for kids college or consolidate credit card debt. Many times these home owners wonder what option is better a traditional refinance vs home equity loan.Refinance vs Home EquityHome equity loans offer a great way to tap the equity in your home and turn it into cash without having to do a full fledged refinance or pay the high closing costs that are associated with them. Home equity loans are available as lines of credit and also normal loans. The home equity loan will function just like a standard mortgage. You close the loans, get your cash and make monthly payments to pay it off. A HELOC or home equity line of credit functions like a credit card. You have a line of credit that you can use for what ever you chose and you spend it as yo need it. Many HELOC also allow you to pay on the interest only making your payments less expensive. The only drawback to these types of loans is they do not … [Read more...] about Standard Mortgage Refinance Vs Home Equity – What is the Best Refinance Home Mortgage Loan For You?
Short Sales are when a lender is "shorted" on the balance of the mortgage that they are holding. The client can't afford their monthly payment and have to find other means on getting out of their current financial situation, by selling their home. Doing a short sale could be like wrestling with a Tiger and trying to win. There are so many stipulations on doing short sales and most of the lenders won't even talk to you about doing one.Lenders are leery about the short sale process; they're going to lose money on the sale itself. Lenders will determine if the short sale is a good step for the client and also for them. Short Sales are a case by case process, which is only determined by the lender themselves. Most lenders are losing anywhere between 40k-100k per sale; which is going to affect their bottom line.The work on the part of the seller and buyer on a short sale is overwhelming. The lender doesn't have a specific department dealing with short sales directly, like with Home loan … [Read more...] about Short Sale Vs Home Loan Modification
When considering refinancing your home there are a number of important questions homeowners need to answer. Why refinance a home loan? Is this a good time to refinance? Where should you go to refinance your home loan? Why refinance a home loan? If your able to make your current mortgage payment with little struggle there may be no reason to refinance. If you have other obligations you are struggling to meet lowering your mortgage payment by $100 or more a month may free up needed funds. Is this a good time to refinance? Timing when refinancing is half the battle. If rates offered are well below the rates you are currently paying you would do well to consider refinancing. Where should you go to refinance your home loan? As a rule it is usually best to contact your current lender for a mortgage rate quote. Likely you will be quoted a rate that is less than competitive when compare to rate quotes offered by online lending marketplaces who are competing for your business. Therefore is … [Read more...] about Home Loan Refinancing – Why When And Where?