Refinance Troubles Down Under
When you opt to take out a home equity loan, obviously, you need money; however, you may not know all the available options. Therefore, you are probably questioning which home equity loan is suitable for your situation and how each loan differs from each other.
A home equity loan, which has many benefits such as lower rates of interest and tax deductions, is determined by the difference between the amount of money you still owe on the house and the market value of the home.
When it comes to deciding on a loan, you have two options, a home equity loan, or a home equity line. Either or may be suitable for your specific situation. Let us discuss what each is and how it can benefit you.
With a home equity loan, a loan in which you receive a determined amount of money, in one lump sum. You also have one monthly payment, as well as a fixed rate of interest. After you have paid the entire sum, you have no further debt. This type of loan is perfect for those who have a solid idea of how much money they need and exactly what it is for.
With a home equity line, you are extended a credit line, which is made available to you as you wish, for a predetermined period of time. This is still based on your equity, however, you do not have to use it all. It is basically there when you need it, you take what you need, pay that amount back, and the line of credit will be available to you again.
What is great about this type of loan is that you can take exactly what you need, maybe you do not need to borrow the full amount of equity you have available. You only have to pay back what you use and nothing more. Those who have specific projects going on and really have no idea how much it will cost typically use this type of loan.
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Help answer the question about home equity loans refinance
My tax value on my home has increased. Should I refinance my first loan and add the home equity loan?We relocated and purchased our home about a year and 7 months ago in an area that was more expensive than we were coming from. The purchase price was $239,000, we put down $14,000, and took a home equity loan of $34,000 to finance the rest of the purchase price and to avoid PMI. I recently submitted a question about whether or not to start paying down the first mortgage or the home equity loan, and got great advice, but I am wondering now that my tax value of my home has increased in January from $200,000 to $279,000 due to reassessment, (I know it wouldn't sell for that now because we recently had comparables done in January), would I save money by refinancing my first mortgage and adding in the home equity loan so the total amount has a lower interest rate? My husband thinks we have to wait 2 years before we can refinance, and I'm not sure about that, but that would be this July. My goal is to pay off our house as soon as possible.
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October 2nd, 2009 at 2:52 pm
If you have a great rate on the first then leave it. It also depends on the size of your HEloan. Ask your broker or bank to compare the two and see what's in your best interest. A HELOC is very easy depending on your credit. If the credit is good then you should expect a no closing cost loan at about 5%
You can email with any other questions
brandonbroker@yahoo.com
October 2nd, 2009 at 3:24 pm
a refinance loan is basically a loan from another company to buy your house again (you pay off your current loan but pick up a different one in the process). This is usually done to get a lower interest rate.
a home equity loan is simply a loan in any dollar amount that is backed by the equity in your home. You can't usually get loans that exceed your equity.
a home equity line of credit (or HELOC) is essentially a credit account, much like a credit card, where your "limit" is the amount of equity available in your home. It is better than a home equity loan for situations where you need to make lots of purchases, rather than one big purchase where you know the exact amount. If that was the case, the equity loan would work better than the HELOC.
October 2nd, 2009 at 6:31 pm
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October 2nd, 2009 at 3:42 pm
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October 3rd, 2009 at 10:57 pm
It all depends on the difference in the value of the place and the amount owed on the loan – that is what's considered your equity. Many banks will only loan up to about 80% of the equity, but a few go higher. For example, lets say you owe $50,000, but the place is worth $60,000, then you have $10,000 in equity. Take 80% of that and you have about $8,000 you could loan against.
I found a great article about it on
http://www.payoffmyloansnow.com
October 4th, 2009 at 1:37 am
You may want to download free OpenOffice, which includes spreadsheet totally compatible with Microsoft Excel.
http://www.openoffice.org/ (version for Windows and version for Linux both are available to download).
There is a plenty of formulas and even macros suitable for any needs. Some macro could be downloaded from web sites of sharks.
The best solution could be also to not taking any loan at all. Saving account with 4.5% per annum, monthly payments and compound interest is your friend!!! In this way, bank gonna pay you, not vice versa. You cannot get loan with 4.5% interest, right?
So, it can get you your home in not so long time and sets you free. Your heart will be filled with joy and your kids will be grateful to you for not having any debts and financial obligations.
October 4th, 2009 at 7:21 pm
Forget the economy and interest rates in general. The question is, what's best for you? Compare the two scenarios, overall costs of a refi verses the home improvement loan. If you are lowering your first mortgage rate at the same time you take cash out, usually that's the winner. I'd have to have details to make a call but it's your details I need, not the economy or who won the super bowl. If you need more info, send me an email.
October 5th, 2009 at 3:38 am
Not only will you not get 5% loan, with "average" credit rating you may not be able to do anything. Good luck.
October 5th, 2009 at 6:08 pm
In almost all cases you can roll them both into one loan, applicable regulations for apply as per the state you live in and seasoning requirements may also apply if the second was done less than 12 months. Check this out with your lender before you pay for anything. I did that with my home in Florida and there was no problems with it. Hope this helps