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HELOC'sHELOC stands for a home equity line of credit. A HELOC is a special type of loan that allows you to tap into the equity you have built up in your home without refinancing your entire mortgage. In other words, it's basically a second mortgage.How much money you can borrow through a HELOC depends on how much your house is worth and how much equity you have. Your equity is simply the difference between the current market price and how much you owe on it. If your house is worth $325,000 and your outstanding mortgage is $150,000, you have $175,000 in equity. Having a lot of equity in your home is a good thing. But if you are faced with a sudden need for cash, having all that money tied up in the house won't do you much good. Enter the HELOC. Opening a HELOC allows you to access the equity in your home when you need an influx of cash. Maybe you need the money to fix your leaky roof or crumbling driveway. Or maybe your car died and you need a replacement. Another common use for HELOCs is debt consolidation. Because the interest rate on a HELOC is lower than rates of credit cards and other consumer debt, a HELOC can be an effective way to get yourself out of debt for good. Keep in mind however, that if you get in financial trouble again and are unable to make your payments you may lose your home. The interest rate on your HELOC will be higher than the rate on your first mortgage. This is understandable since second mortgages are more risky from the lenders point of view. The interest rate is also affected by the amount of equity you are cashing out. The more equity you leave in the home, the lower the rate. There are as many different types of HELOCs as there are types of first mortgages. You can have a fixed interest rate or an adjustable rate. You can take the entire amount as a lump sum, or you take part as a lump sum and leave the rest as a line of credit. You may receive checks to write against your credit line and some lenders even offer ATM cards for automatic withdrawals. Whatever your needs may be, there is a HELOC out there for you. Shop around as you would on a first mortgage and make sure you are getting the best deal possible. Recent Mortgage Info Interest Rates following the Jobs Report - A dismal Jobs Report with the highest unemployment in 5 years and revisions for the worse to previous reports isn?t much to about?unless you?re in the market for a new mortgage. This bad news for the economy translates to improved mortgage interest rates. Currently (at the time of this post) I?m on my second rate sheet from many of the lenders I work with and day is not over yet and rates continue to be very volatile. On a side note, let me know if you prefer the arrows (as shown today) or [Read More...]
Mortgage Rates Ease as Economy Regains Center Stage - Mortgage rates drifted lower this week, as reports of broad economic weakness helped keep a lid on expectations of any near-term jump in interest rates. Freddie Mac (FRE: 5.08 -5.58%) said Thursday morning that its weekly survey of lenders found that the 30-year fixed-rate mortgage averaged 6.35 percent with an average 0.7 point for the [...] [Read More...] Debtor Friendly Legislation and Unintended Consequences - The rate of home foreclosures in the current mortgage crisis has not been evenly distributed. Some states -- such as Nevada, California, and Florida -- have seen many more foreclosures than others, and not simply because some of them are big states. Take California, where in some localities the foreclosure rate has been as high as 25 percent. What gives here? Are California home buyers and mortgage brokers just much more irresponsible than the rest of the nation? Is there some California specif [Read More...] Repossession levels have jumped since January - A recent report has shown that repossession levels in the UK have risen by 41% since January of this year, with around 18,900 repossessions taking place within the first six months of the year. This reflects a rise of 41% compared to the previous six months of the year, and a rise of 48% compared to the first six months of last year. The Council of Mortgage Lenders stated that whilst the rise was a worrying one there were still many people that were keeping up with their mortgage repayments, s [Read More...] FHA Mortgage Definition - FHA mortgages are a type of government backed home loan. While FHA mortgage loans have been around for some time, the program was recently expanded to include FHASecure loan offerings to assist homeowners with adjustable rate mortgages that they can no longer afford. Here is the basic definition of FHA Mortgage Loans. FHA Mortgage Loans are government home loans that meet underwriting guidelines set by the Federal Housing administration and are backed by Ginnie Mae. These loans were originall [Read More...] Many Realtors Miss The Days Of The Housing Bubble - The Warwick Beacon reports from Rhode Island. ?With statewide home sales down by 5 percent from last year and the median single-family home price down 12.5 percent from $280,000 in July of last year to $245,000 this year, many realtors miss the days of the housing bubble. Over 26 percent of all houses sold from April until July were either foreclosed properties or short sales-both of which sell at far below the market price.? ?Robert Scaralia, president of the Rhode Island Realtors Association [Read More...] |
