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Home Equity
A home equity line of credit is like a home equity loan in that the house is used as collateral. However, home equity lines of credit allow borrowers to set up a credit line that can be used much like a credit card. During a period of time, usually five to ten years, the homeowner is able to take large or small amounts from the account until the drawing period ends or the amount of the loan is exhausted. This type of loan is an adjustable rate mortgage, which varies with the market.
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Bad Credit Refinance
There are many reasons to look into refinancing, especially if you have bad
credit or if you are currently being harassed by creditors. If you:
- Are in need of debt consolidation
- Have a high interest loan
- Have an adjustable rate mortgage
- Would like to invest in home improvement or repair
- Need to pay for college tuition
- Have significantly repaired your credit report and would like to pay off
an old bad credit loan.
- Want to make a major purchase but do not have the funds
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Home Equity
The reverse mortgage is also an adjustable rate mortgage, but is unique because the homeowner (who must be 62 years or older) is at no time obligated to make monthly payments on the loan. The amount of the equity on the home is made available to the owner in full, in monthly advances or as a line of credit, only to be repaid after the life of the owner through the sale of the home or by the family if they would like to keep the home.
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Land Loan
Usually, the homebuyer places a down payment on the lot and uses a line of credit to finance the construction of the home. As construction moves along, the buyer borrows from the line of credit to finance the building. Once the construction is finished, the land loan and the line of credit are rolled into a single mortgage to be paid by the homeowner.
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Mortgage Calculation
Use mortgage calculation to make sure that the loan you obtain is in action what it appears to be on paper. Use our mortgage calculator to research your terms or apply online to contact lenders about your new mortgage.
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Mortgages Online
Other basic but important terms to understand are:
- Principal is the amount borrowed (on which interest acts) which is repaid
monthly
- Amortization is the process of repaying the amount borrowed through monthly
payments of principal and interest.
- Negative amortization is when the monthly payment is not high to adequately
pay the loan off. In this case interest builds too quickly and the principal
grows instead of decreasing. This can occur because of lender scams or because
of monthly payment caps.
- Equity is the value of your house left over after subtracting the total
of your mortgage. If your house has a market value of $130,000 and a mortgage
of $100,000, the equity is $30,000.
- An index is used to determine the rate on an adjustable rate loan. For some
loans this rate may be the Prime Rate or the average rate of a one year Government
Treasury Security.
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Reverse Mortgage
Reverse mortgages do not affect Social Security or Medicare, and are not counted as income on the homeowner’s taxes. A reverse mortgage is a wonderful opportunity to gain independence through substantial loan that requires no monthly payments. Apply online to begin the process for your reverse mortgage.
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