Virginia Beach Home Loans
Fixed Rate Second Mortgage or Variable Home Equity Line of Credit? Home Equity Report 2006
By Barry Donavan
More and more Americans are cashing in on their home's equity by taking out a second mortgage. Home equity financing has evolved to meet the growing consumer demands for borrowing, spending, and building. One of the most powerful cash vehicles driving our economy is the new and improved home equity loan. Consumer debt is at an all time high, and home equity values are also peaking at all-time levels. Let's examine the primary reasons for the increasing popularity of home equity loan products.
Home equity lines of credit are revolving accounts that are considered to be second mortgages secured by real estate. These 2nd mortgage credit lines have become very accessible online. Equity lines of credit can be beneficial tools for homeowners if used properly. Helocs offer flexibility because you can borrow and re-borrow without having to start the loan process over again like you would with a traditional home equity loan. Another great home equity line benefit remains that you only pay interest on the money you access.
A few years ago, second mortgage rates hit all time lows.
Over the last year and a half, the Federal Reserve has increased the WSJ prime rates almost 3% points. Unfortunately this has had the biggest impact with variable lines of credit rates. During this record period for rates, home credit lines were over 1% lower than the traditional fixed rate home equity loan. There are many reasons people continue to take out home equity lines of credit. Some of the most common purposes for an equity line are bill consolidation, home improvements and buying a second home. What people love most about the equity credit line is the affordability feature that comes standard with low minimum payments.
On the flip-side, many homeowners like the responsible amortization that comes with fixed rate home equity loans. With these fixed rate second mortgages, each monthly payment allocates a portion to pay down both interest and principal of the loan. In 2006, fixed rate home equity loan rates are actually lower than equity lines of credit. The fixed rate mortgage is becoming increasingly attractive to consumers. Fixed rate loans offer "peace of mind" because people can go to sleep at night, knowing that their payment will not go up.
Both types of home equity financing offer lower interest rates than credit cards. Increased cash flow and lower monthly payments are great benefits of home equity. Many lenders have expanded their second mortgage guidelines for people with bad credit. Stop playing the balance transfer game with your credit cards and lock into a low rate second mortgage. In most cases, consolidating credit cards with a home equity loan will save you thousands of dollars a year.
Barry Donavan is a business writer who focuses on home finance and consumer credit. In addition to writing, Barry is a finacial consultant and loan officer at BD Nationwide Mortgage. You can read more of his home equity articles and get more information about fixed rate second mortgages and variable home equity lines of credit.
Copyright BD Nationwide Mortgage Company 2006 �
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Refinancing Your Home Equity Line of Credit - What are Your Options?
By Carrie Reeder
Several options are available when deciding to refinance your home
equity line of credit. You can opt to refinance all your mortgages into
one. Or you can rollover your line of credit into a second mortgage.
Available terms and rate structures also give you flexibility in structuring your payments. Make sure that when you refinance, you find the lender with the optimal financing for your selected terms.
The Decision To Refinance All Or One
While you are refinancing your home equity line of credit, it is also a
good time to revaluate your other mortgage. Depending on your original
terms, you may find that you also want to include your first mortgage
as part of a refi. This way your line of credit refinancing will qualify
for even lower rates while saving on closing costs.
But if you have exceptionally low rates on your first mortgage, then
refinance your line of credit as a second mortgage. If you are undecided
on the issue, request loan estimates for both types of refinancing and
let the numbers tell you which is the best option.
Refinancing is also a good time to consider cashing out part of your
equity. By doing so now, you save on additional processing fees for any
future loans.
Available Term Options
Once you have decided on how much you want to refinance, you will also
need to select appropriate terms for you financial goals. Rates can be
fixed or adjustable, which affect your payment amount.
The length of your loan can be shorten or lengthened to give you a more
manageable payment. But if you do decide on a short term, you may see
your rates go down. You can also structure payments for every two weeks,
further reducing your loan's period.
No Lender Has The Best Deal On All Types Of Refinancing
No lender can guarantee to have the best deal on all types of
refinancing, so shop around with your specific loan amount and terms. With risk
free quotes, you can learn about loan costs without hurting your credit
score. And with online lenders, the whole process just takes a few
minutes.
Carrie Reeder is the owner of http://www.abcloanguide.com. View her recommended sources for home equity refinance loans online.
View her recommended lenders to refinance your home equity loan online. Also, view her recommended debt consolidation companies online.
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Refinance Home Equity Line of Credit - Can You Refinance with Poor Credit?
By L. Sampson
No matter what your credit situation, you can refinance your home equity line of credit. Trading in the unpredictability of adjustable rates, you can refi for secure rates. You also have the option to restructure your debt, enabling you to get out of debt sooner or to extend your terms for more manageable payments.
When Does Credit Matter?
Your credit score won't prevent you from refinancing since you already have the security of your home to back your refi. Poor credit will affect the rates you can qualify for. However, you can overcome this with a few tips.
First of all, carefully search out loan quotes to find the lowest
rates. You don't want to base your decision on publicly posted rates since they don't apply to your credit situation. Instead, request loan estimates based on your unique credit profile, just don't allow access to your credit report at this time.
You can also trim rates by rolling over your line of credit into a
second mortgage or combining it with your first mortgage. These types of loans offer better rates than line of credits, but closing costs are more expensive. Another option is to shorten your loan term to five years. Not only will you save money on actual interest charges, but you will also qualify for lower rates.
Are Lowest Rates The Only Goal?
There are many loan options that affect your financial bottom line besides rates. For instance, loan terms can save you money on interest or help you reduce your monthly payment. Ideally, you want the cheapest, shortest loan. But if finances are tight, paying additional interest to lengthen your loan may be worth it.
Peace of mind is also important to people, especially when it comes to their mortgage payments. That's why a fixed rate loan can be appealing, even if it has higher rates than adjustable rate loans. Caps, which are negotiable, also offer security for those with adjustable rates.
Closing costs and annual fees can also add to the cost of a loan. That's why you want to consider the APR to understand the true cost of the loan. With a little bit of comparison shopping on your part, you can find a reasonable refinancing no matter what your credit score is.
Visit Home Equity Wise to view our Recommended Home Equity Lenders [http://www.homeequitywise.com] online. Also, visit Home Equity Wise to obtain more Home Equity Line of Credit Information [http://www.homeequitywise.com/home_equity_lines_of_credit-line_of_credit_vs_a_traditional_home_equity_loan.shtml].
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Have You Taken Out a Home Equity Line of Credit?
By Barry Dawn
If on any given month, you're constantly struggling to pay off a gazillion debts and you can barely meet the minimum payment, do not feel like it's the end of the world. No, it's not. You may be besieged with bills everywhere, but you are not alone. There are many others in the same boat as you. But, here's one solution you may not have considered before: taking out a home equity line of credit. With an existing mortgage, you can take out a debt equity loan. Use it to consolidate all the debts that you have. This way, you do not have to worry about paying this or that. You can focus on meeting only one payment at one time.
How do you go about taking out a home equity line of credit? It's not as difficult as you believe. Any mortgage broker can help you get refinancing on your first mortgage. However, be careful. do not sign with the first broker you come across. Be smart and take the time to shop around. Compare different lenders, compare different terms. You will find as you go along that rates and terms vary dramatically from lender to lender. Make sure you sign only with the lender who gives you the best terms for the best price.
Next, we go to choosing your refinancing package. Usually, consolidating debts into one's mortgage jacks up your monthly payments. The increase depends on how much your debt is. However, there is a way to lower your monthly payments even when you consolidate your debts. How? It's simple: simply apply for your mortgage extension. Your mortgage will be extended for a few years but in return, your monthly payments will be lower.
In one issue, Money Magazine encourages homeowners to replace their first mortgage with a home equity line of credit. Of course, homeowners should only do this if they have lower debt than equity and if they intend to stay in the same house for 3 years or less. These lines of credit are available everywhere in the country at a rate of 4 percent or even lower!
The good thing about taking out a home equity line of credit is that even if the rates jack up by one percentage point every year, the rate you got your credit for will still stay low by the time you pay off your loan. Best of all, you do not have to concern yourself with closing costs; most home equity line of credit loans do not have them. In other words, you do not have to agonize over how to recoup your closing costs through interest savings - something that you otherwise would have done if you take out a traditionally structured mortgage refinance.
So go ahead, feel free to make savvy use of your home equity. Such a loan is a great way to get cash at low interest. It's flexible, it's easy, and it pays off big time in the long run.
Allegro Mortgages Corp. - Best Broker for All Your Financing Requirements
(416) 987-0008
Are you thinking of taking out a home equity line of credit? Check out AMortgages.ca for information on HELOCs as well as the terms for mortgages, Concord lenders offer. You can get information too about the mortgages Toronto homeowners typically get.
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Home Equity Loans Or Equity Line of Credit?
By Rita Cook
Nowadays it seems that lenders are offering home buyers more choices when it comes to borrowing money. From equity lines of credit to home equity loans to fixed rate home equity loans to mortgage refinancing to adjustable rate mortgages, what does it all really mean? With so many catch phrases and too few definitions lending companies are often only serving to complicate matters instead of clearing things up.
Let's take a look at the equity line of credit versus a fixed rate home equity loan. The first question to ask is what is the difference? To begin, let's define what a home equity loan is and how it works. If a home buyer decides to use the equity already built up in his home he may qualify for a large amount of credit with a lower interest rate when needing to borrowing money. Also, depending on the situation the borrower may be able to deduct this interest rate from his taxes since the debt is protected by the home.
A home equity line of credit is a form of credit that is extended with your home being the main source of collateral. This type of credit line is basically what is known as "revolving credit" and it can be utilized for big ticket items such as children's education, home improvement, medical bills or just to get ahead on monthly bills and expenses. A good idea of what kind of credit you will be given is to figure roughly 75% of your home's appraised value and then deduct the remaining balanced owed from the existing mortgage.
Of course other factors come into play when applying for this type of credit line. These include any additional outstanding debt, your financial history and your income. However, after you are approved you can borrow money up to the amount of the credit line whenever you need by using a check or credit card that has been furnished to you by the lender.
In some cases with a home equity line of credit you will be given a specific period of time in which to borrow the money. At the end of the "draw period" you might be able to renew the credit line however it is just as possible that you won't be able to borrow any additional money. This is usually spelled outlined in the lending agreement therefore before any paperwork is signed read the fine print and ask questions. Also, be aware that you might just have to pay the money you borrowed from the home equity loan back in full at the end of the designated period.
Some lenders will offer a discounted interest rate on home equity loans, but chances are good that the lower interest rate will only apply for the first three to six months of the loan. If you opt for what is called a variable interest rate you will find that your monthly payments will change as interest rates change. If you decide to sell your house you will also be expected to pay off the home equity line you have borrowed.
Along the same lines of a home equity loan comes the fixed rate home equity loan meaning the borrower knows what the monthly payments will be and the time period of repayment. The fixed rate home equity loan is typically secured by either a first or second mortgage and the loan can be granted for up to several years or more. First Horizon Home Loans in Memphis Tenn. describes fixed rate mortgages as "featuring an unchanging interest rate, which is determined when you are approved for a mortgage and remains the same for the term of the loan."
Remember too that there are fees involved for establishing a home equity loan so take that into consideration before making a final decision on a loan overall. The most important factor a person should take into consideration when choosing a loan program whether it be an equity line of credit, a fixed rate home equity loan or something in between depends on your financial portfolio, how you believe your finances will change within the next five years, how long you plan to keep the house you are currently living in and how secure you feel with changing your mortgage payments and increasing your debt. Do you feel more secure with the knowledge that your payments will be the same amount every month for a set number of years (fixed rate home equity loan) or that the amount can fluctuate based on interest rates and how much you borrow within your window of opportunity (equity line of credit). Either way, before securing a loan talk to a financial advisor and determine all your options before making a final decision.
Rita is a seasoned veteran writer focusing on home equity loan related articles for homeowners. You can read more home equity related loan articles at Home Equity Loans & Credit and get more information about debt consolidation & equity loans at Home Equity Loan Center
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Familiarized Yourself With Home Equity Line Of Credit
By Raks Martin
Home is considered as the most vital assets that you need to protect because it also safeguard your home and your family from all kinds of weather condition. There are lots of means on how one can lose his or her home. It is not recommended to se home as collateral to acquire home the home equity line of credit. Professionals and specialist in this field recommend that this should only be used for important emergency cases like medical bills, home improvement as well as education. It is not a good idea to use your home to get the money that you need for your daily expenses. You will surely regret using your hone as collateral when the time comes that you need to leave your home, because of the inability of paying your debt.
How Home Equity Loan Works
This is like having a credit card which you also have credit limit and it is also up to you when you will use the money. This is the difference of this loan from other mortgage loan. In home equity line of credit loan, the full amount is not given to the borrower. The money can be drawn anytime within the set period. The amount of the interest rate of this loan can change over time that is why it is not practical for anyone to acquire this kind of loan because the interest rate can increase. The best home equity line of credit is something that will not give you a very high interest rate.
How to Repay the Loan
This is the most interesting and vital part that you should know once you decide to get your own home equity line of credit. You can choose pay only the minimum amount. It might include half of the principal and the interest rate. There are loans that will allow you pay for their interest rate during the draw period. The only drawback of this system is that you will need to pay the principal amount in lump sum. If you have mortgage refinance with bad credit, then it will not be easy for you to apply for this kind of loan. Because companies know that you do not have the capacity to pay the loan.
You can also choose to pay for the minimum amount, but it only means that your payment is not enough to cover the principal amount. You still need to a huge amount of money at the end of the term. This loan is good, because it can offer cash out mortgage refinance, but this is not an ideal solution for huge mortgage debt.
Raks Martin writing articles all about home equity line of credit [http://www.loansstore.com/home-equity-line-of-credit/], to give people information about this type of loan. I am an expert author and research of the best home equity line of credit and second mortgage loan [http://www.obama-loanmodifications.com/second-mortgage.php].
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