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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 �
Article Source: https://EzineArticles.com/expert/Barry_Donavan/47315
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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.
Article Source: https://EzineArticles.com/expert/Carrie_Reeder/829
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Avail Best Home Equity Line of Credit Give You Easy Home Finance
By Raks Martin
Home Equity Line Of Credit is superior financing methods which can be of immense help should you go for the mortgage refinance. It is the best method of mortgage refinance for various reasons. The very first reason why Best Home Equity Line of Credit is considered to be the best, if seen from the perspective of borrower is that the borrower will only pay the interest rate on the amount he/she has actually taken. For example, if the equity on home is $ 70,000, and the mortgage homeowner takes $ 40,000, he/she will have to pay the interest rate as calculated on $40,000 and not more. The interest rate charged on the equity will definitely make it easy for the homeowner to have secured loan which is easy to pay.
In the present financially despicable position, many individuals are going for HELOC loans and many have succeeded in repaying the mortgage running on their home. It is also very essential to pin point here that the lender offering such types of loans should be experienced enough to give you best rate of interest and also make correct calculations on your home mortgage.
HELOC financing is easy to get, but do you really know that it will lead you into financial woe if you are not going in sustained manner. For example, if you have bought the first HELOC loan, and after some period of time you buy second HELOC, without repaying back the first one, there are pretty good chances that you get out of control. The debts will start building you and which will obviously make your financial situation completely crunched. In this situation, you have to refinance your house to pay the HELOC debts. The situation is quite tricky for you to come out of it easily.
Did you have the real idea on how to Mortgage Refinance with Bad Credit? Most of the homeowners actually don't have the idea about how to go for mortgage refinancing. All they are aware about is to refinance their mortgage, and nothing beyond that. You should check into every aspect of the mortgage refinance and then make the start.
Second Mortgage rates are low than the first mortgage rates. Buying the second mortgage loan is always on your advantage side, but you have to make sure that you have completely searched through the information.
You can get help online with our experts by filling small form.
Raks Martin is a writer at Loansstore.com reliable place to search for quick information related to Second Mortgage [http://www.obama-loanmodifications.com/second-mortgage.php] and Home Equity Line Of Credit [http://www.loansstore.com/home-equity-line-of-credit/].
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