Home Equity Loans and Credit Lines

Home equity loan is the term which uses equity as the base to ensure assurance of the loan payment. It is basically a type of finance that is used for the purposes like home repairing, college and school educations as well as for the medical purposes. This takes in the person’s home on legal demands and borrower has to put his home on lien for this kind of loan approval making reduced home equity in this case when borrower’s home is taken into possession.

These types of loans are regarded as the second type of lien which is commonly known as second position lien. To approve this kind of loan you must have a good credit history and a reasonable loan to value ratios to get the benefit of it. Furthermore this home equity loan has basically two types and these are closed end and open end. They are basically both considered as the second mortgages as they are secured in terms of mortgage value. This home equity loan is a short term loan and is not at all taken to be in the means of a longer term loan assurance. Wherein United States it is sometime applicable on person’s personal income tax.

Home equity loans are regarded as security loans, which means if the borrower is unable to pay the debt his possession will be occupied and he will have no choice but to face the consequences. This is how it is in one way or another is a type that is called the secured type of loan, as collateral is a part of it. The term which defines this in US traditional mortgages are non-recourse loans, which ensure the debt in terms of pledge involving collateral.

In case the borrower is unable to pay the debt his possession can be sold to get the home equity loan paid back to the giver so securing the amount the borrower has taken. For the case which involves credit card debt is basically considered to be a non-secure way, but involving home equity in the credit card loans makes it secure thus providing better collateral to assure the loan being approved. This is how it uses home equity loan a basic term in the approval of a person’s loan and this is mostly the basic format for the US citizens.

One thing that should be taken into account by the borrower is when deciding the best possible type of loan he should must be ponder upon one thing and that is whether the loans are dischargeable or not means the debt is dischargeable in bankruptcy. As the US students loans are not dischargeable in bankruptcy. So this must be taken into account at the time of decision.

home equity loans

 

Home Equity Loans

A Home Equity Loan allows a homeowner to borrow money by leveraging their equity, or the amount of money they have invested into owning their home. It can either be a fixed rate mortgage or an adjustable rate mortgage which can be acquired as a lump sum or used a revolving line of credit. In other words a home equity loan (or line of credit) is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, medical expenses or other expenses.

There are two kinds of equity debt: home equity loans and home equity lines of credit. Home equity loans are provided in lump sum, and they are paid off in equal monthly installments over a set of period. Home equity lines of credit have revolving balances and work like a credit card.

You may be putting your most valuable asset at risk, if you agree to a loan that is based on equity you have in your home. Those with low incomes or poor credit should be careful when borrowing money based on their home equity.

Equity is the difference between how much the home is worth and how much you owe on the mortgage.

Usage of Equity loans and Credit lines

  • Making repairs to a house can make the home safer and more comfortable. Make sure you apply for the loan before putting the home on the market, if you want to spend equity money to prepare the house for the sale.
  • Credit card interest rates often are more than 10 percentage points, higher than rates on home equity loans and credit lines. It is best to use cash instead of carrying cards.
  • Low interest rates also make equity loans an option when financing a car or some high-price purchased.

Things you need to know:

  • Keep records of what you’ve paid, including billing statements.
  • Consider all the costs of financing before you agree to a loan and read all items carefully.
  • Verify if credit insurance is required as a condition. If you want the added security of credit insurance, shop around for the best rates. Don’t agree to a loan that includes credit insurance you don’t want.
  • First consult an attorney, a knowledgeable family member, or someone else you trust.
  • Using an equity loan to pay of debt may make monthly payments cheaper but could cost you ore in the long haul, because you’re taking much time to pay off the debt.
  • Don’t agree to a home equity loan if you don’t have enough income to make the monthly payments.

Debt Consolidation

Debt consolidation is the replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. In other words it is a loan used to repay several loans.

Any type of loan can be wrapped into the debt consolidation process. Common types include finance charges, overdraft charges, personal loans, credit cards, late fees, medical bills, back taxes, utility bills and store cards. There are thousands of people every week who recognize that their credit situation is less than desirable. Many of these people seek out a solution and find it in debt consolidation. It allows you to reduce your monthly payments into a single, simple bill, while lowering your interest rates and helping you pay down your debts more quickly and easily. Debt consolidation loans are essentially a type of refinancing. With your debt consolidated and restructured into a single monthly loan payment, you’ll see, your debts disappear, your monthly payments go down, and have the chance you deserve to turn over a new financial leaf.

A good debt consolidation service can help you get back on your feet, and that is something you may already know and be ready to look at. Many people are not even aware of what a debt consolidation service does. In order to get your debt under control, the best thing you can do is call all of your creditors and let them know that you are having trouble. That is where a debt consolidation service steps in.

saving money

Refinancing

Refinancing is the process of obtaining a new loan to replace an existing loan or lease balance. The most common consumer refinancing is for a home mortgage. Refinancing can be worthwhile, but it does not make a good financial sense for everyone. It becomes worth if the current interest rate on your mortgage is at least 2 percentage points higher than the prevailing market rate. When you refinance you can adjust the terms of your loan including monthly payment amounts and the length of the loan. It may be a financially better decision to pay a bit more in interest rather than pay points for a loan with lower interest rate, but his type of situation is particularly available if your credit rating is excellent.

 

Home Loans

home loans mortgage financing

Securing a home loan is the most important step in the home-buying process. Spend some time to get to know the prices of other homes in your neighborhood. Have the property inspected by a licensed home inspector.

In order to finance or refinance a loan the lender requires documentation to verify and substantiate your employment, financial situation, credit to assure its investors that you have the ability to repay the money. The documentation may consist of tax returns, bank statements and any other information the lender deems necessary. The loan agent will be the intermediary between you, the borrower and the underwriter. The underwriter will either approve the loan as it is or, more likely, provide a list of items that need clarification. It typically takes two and four weeks, possibly longer for the entire loan process, depending on the circumstances of the loan. Once the loan is approved, the loan papers will be sent to the escrow/title of the company. The escrow officer will contact you to set up an appointment for you to come in and sign your papers. They need to provide you a copy of everything you sign. From the date you sign the papers, it will be another two or three days until the loan is funded, which is when the money is transferred. Once the loan is recorded, the transaction is complete.

 

Car loans

auto financing car loans

Applying for a new car financing without knowing your credit score is the dumbest thing a new car buyer can do. If the manufacturer offers you additional rebates in exchange for you through the manufacturer, then you should take their car financing. If you trade in for new Car loans, make them put in writing they’ll pay off your car loan in 10 days, or no deal. People with bad credit pay higher auto loan interest rates. You can run your own credit file all you want, but if dealers run it for new cars, then your score drops.  According to the Consumer Federation of America, car buyers are often overcharged by 3% on their loans at the dealership, which can add $1000 to the life of their loan. If you owe more on your car than it is worth or put down less than 20%, you should get Gap coverage from your insurance agent.

 

Commercial Mortgage | Commercial Real Estate Financing

commercial real estate financing and commercial real estate loans

A mortgage used to buy a commercial piece of property or commercial building.

Today, the cost of commercial development is extremely high and most individuals and companies do not keep the cash on hand for commercial developments. Commercial mortgages are available to clients who are searching for financing to cover costs for purchases of commercial buildings, multi-family units, fuel stations and apartment buildings. Commercial lenders have different criteria for each situation.

Adjustable Commercial Mortgage funding is a real estate loan with an interest rate that changes periodically, according to an index that is selected when the mortgage is issued. You might qualify for a larger loan and your ARM could be less expensive than a fixed rate loan over a long period. To compare one Arm with another or with a fixed rate mortgage, you need to know about margins, indexes, discounts, cap structures, convertibility and negative amortization.

 

Fixed Rate Commercial Mortgage products are mortgages that have fixed interest rate and payment for the full term of the loan. Multi-family, full and limited service hotels, offices, anchored, unanchored, senior housing, light-industrial are typical properties included. Interest rate depends on property type and underwriting criteria.

 

Commercial Second Mortgages are normally used in conjunction with a new first loan. They will have a term of no less than 5 years with interest only payments. It reduces the LTV (loan to value) of the first loan in order to allow you to more easily qualify for the loan. Interest only payments, annual payments, fees etc are a variety of options that help you to keep your immediate payments down and defer the costs of the second mortgage.

 

 

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