Home Equity Loan Program
A home equity loan provides for borrower’s money against the difference between your home’s value and outstanding mortgage.
Indications - this program is a good choice for:
- ['Replacing the existing mortgage with a new loan doesn’t make sense because the interest rate on the existing mortgage is much lower than current interest rates.']
- ['You have a need for a specific amount of funds that can be used for home renovation, medical expenses, purchasing an automobile, or other financial needs.']
What are the benefits?
- No Existing Mortgage: In general, Home Equity loans are recorded in a second lien position and have higher interest rates than mortgage loans recorded in first lien positions. As such, borrowers that don’t have an existing mortgage may benefit from more suitable program such as a Cash Out Refinance.
- High Loan to Value Ratio: In general, home equity loans allow for borrowing up to Combined Loan to Value ratio (CLTV) up to 80% of the home’s value.
- Qualifying and Credit Standards: Home Equity Loans typically require above average credit scores and stable employment income.
- Timeline: Home Equity Loans typically take about 30 days from application to funding.
Typical Disqualifying Considerations?
- Extended Fixed Rate Terms: Home Equity Loans generally allow for predictable and consistent low monthly payments because they can be repaid over 15 to 30 years.
- Lower Interest Rates: Compared to unsecured loans (ie. Personal loans or credit cards), interest rates are often much lower because the loan is collateralized by real property.
- Tax Advantages: Home Equity loans may qualify for tax deductions.
Alternative Programs
