Home Equity Loans

A home equity loan has many different names such as equity mortgages, equity loans, or a second mortgage. A home equity loan allows the owner of the loan to borrow against the principle of the loan. For example, if the owner of the loan wants to start a business or has an unexpected emergency, the owner of the loan can borrow against the equity of their home. The amount the owner can borrow will be contingent, at least in part, on how much equity they have built into the home and where the current value of the home market is at the time.

Home equity can easily be described as the difference between fair market value of the home and what is currently owed on the mortgage. For example, if your home is estimated at $500,000 and you owe $325,000 on your home loan, you have $175,000 in equity that you can borrow from. For the most part, the owner of the loan can borrow up to 85% of their home equity loan.

Do you have enough equity in your home, if so refinancing can offer flexibility!

• Dive into your equity – with cash-out refinancing, you have the option of using the available equity in your current home to fund home improvement projects or even pay off a high-interest credit card or loan.
• Interested in lower rates – if you take advantage of a lower interest rate, your monthly payment could decrease, freeing up cash you can use toward other financial goals. This could directly affect the amount of interest you pay for the duration of your loan.
• Change your loan term – if you want to pay off your loan sooner, you can shorten your loan term. While it’s likely you’ll pay less interest over the life of your loan, your monthly payment may go up.

You can also lower your monthly payment by refinancing to a longer-term loan. While this will lower your monthly payment and free up some cash each month, you may pay more interest over the life of the loan.

• Convert an adjustable rate mortgage (ARM) to a fixed-rate mortgage – enjoy payments and rates that don’t change over time.

If you are ready to apply online, let’s go (click on the button below). Or, if you have questions, email or call us.

Home Equity Conversion Mortgage (HECM)

The Home Equity Conversion Mortgage (HECM) also targets the senior citizen and their age bracket of 62 years and older. This program allows seniors to convert the equity in their home into cash. The amount they are able to borrow with HECM is based on the appraised value of their home and no credit check is necessary. Most seniors are on a budget and the Home Equity Conversion Mortgage program will help to use needed cash that is borrowed against the equity of their home. No payments are due until the home is sold or the borrower passes. At this point, the loan is due in full and must be paid completely.

HECM for Purchase

The HECM for purchase program can be used for senior citizens over the age of 62 to purchase a single-family home, a small multi-family home, or a condominium with the proceeds of a Reverse Mortgage. The potential home buyer may want to look into a Fixed Rate-Loan depending on the current interest rates. From this program, the current homeowner will have the luxury of having one transaction making it easier and faster for the homeowner.

Is there a Down Payment Required

The Home Equity Conversion Mortgage (HECM) will NOT require the potential home buyer to place a down payment on the new home. Like a regular reverse mortgage, the loan amount received is based on the equity of the current home. Keep in mind, there must be equity to cover the accrued interest of the loan amount. The HECM will also require an estimate of 50% of the purchase price in cash. This is a form of a down payment in a sense and will have to be made regardless of how long the borrower plans on remaining in the new home.