The Facts About Second Mortgages
by: Joseph Kenny
Your home: It's probably your biggest asset. Having a home to back you up when you need a loan is one of the greatest advantages of home ownership. In recent years, there has been a major increase in the amount of people looking to use their homes as a way to get access to extra money when they need it most. One of the best ways to do this is through a second mortgage.
A second mortgage is exactly what it says it is - a loan made in addition to your first mortgage, and it's based on the amount of equity you have built into your home. Many people use them to fund home renovations, to pay off credit cards, or to put a child through college. Since you've already been through the process once, the underwriting required to get a second mortgage is much simpler than it was the first time around, and the cost of the transactions involved will be significantly lower. This usually makes up for the fact that interest rates on the second mortgage are a bit higher than they were on the first one.
On a second mortgage, you will borrow a fixed sum of money against your home equity, and pay it back over a specified amount of time. The amount you borrow will be combined with the amount you still owe on your first mortgage.
It all sounds pretty simple. There are just a few things to keep in mind. First of all, don't take out a second mortgage on your home unless you've built up a fair amount of equity in the property already- that is, made payments on the original mortgage balance for a good amount of time. You may still be able to get a second mortgage if you don't have much equity, but your rates will be so much higher, and the amount you can borrow so much lower, that it will essentially be a waste of your time and money. This is one of those things that is worth waiting for.
Also, look into the other options of borrowing against the equity of your home, including a home equity loan and a home equity line of credit. All of these options allow you to borrow against your equity, but there are slight variations among them that mean one of the three may be the best option for you. It will depend, for the most part, on your particular financial standing, the amount of money you need to borrow, and the amount of home equity you currently have.
About The Author
Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find all the different loan types explained.
|
ARM ? Adjustable Rate Mortgages
ARM ? Adjustable Rate Mortgages
by: Dan Lewis
Traditionally, homebuyers could look to two forms of mortgages ? fixed rate and adjustable mortgages. While there are now many more options, this article takes a look at the adjustable rate mortgage.
What is an ARM Loan?
An adjustable rate mortgage [?ARM?] is a basic mortgage with one important exception. With an ARM, your interest rate will start low but typically move up throughout the link of the loan. The timing of the movements is dictated by the terms of the loan. The rate may be adjusted every month, but more typical periods are every six or twelve months. Most adjustable rate mortgages also have a cap on the amount the interest rate can be raised in a particular period.
?ARM? Yourself?
A homebuyer has to be very careful when selecting an adjustable rate mortgage. Buying a home necessarily involves budgeting out how much of a monthly mortgage rate you can afford to pay. With...
ARM ? Adjustable Rate Mortgages
Mortgages > ARM ? Adjustable Rate Mortgages
The Disadvantages of Reverse Mortgage
The Disadvantages of Reverse Mortgage
by: Charles Kirkendall
A reverse mortgage can be an attractive option for many home-owning seniors that are having a hard time making ends meet.
With a reverse mortgage, a senior homeowner will receive money for their home equity from a lender without having to make repayments for as long as they live in their home.
So with the right reverse mortgage a senior homeowner can maintain their standard of living while retaining ownership of their home.
This of course, is the picture that all the reverse mortgage companies try to paint for prospective borrowers.
Nonetheless, there are many differences that have to be understood between reverse mortgage's and conventional loans.
If these differences are not understood, they can cause financial problems for reverse mortgage borrowers.
Disadvantages of Reverse Mortgages.
The first disadvantage is the relative cost of...
The Disadvantages of Reverse Mortgage
Mortgages > The Disadvantages of Reverse Mortgage
A Guide to Common Short-Term Loans
A Guide to Common Short-Term Loans
by: John Mussi
While some of the most well-known loan types are for large amounts of money and are repaid over several years (such as mortgages and automotive financing loans), there are a variety of loans that are designed for smaller amounts and for shorter periods of time. Some of these loans come from banks or other common lenders, whereas others come from specialty lenders that deal specifically with these types of short-term loans.
If you're in the market for one of these shorter-term loans, or if you're just wanting to see exactly what options are available, then the information presented in this article is for you.
Below you'll find information on the short-term loans that are commonly offered by traditional lenders such as banks, as well as other common types of lenders and a few specialty lenders that aren't as common but that deal almost exclusively in short-term loans.
Traditional Lenders...
A Guide to Common Short-Term Loans
Mortgages > A Guide to Common Short-Term Loans
A Guide to Buying a New Home
A Guide to Buying a New Home
by: John Mussi
If you've decided to make the leap from renting a home to owning a home, you might be a little overwhelmed at the prospect of shopping for homes and applying for mortgage loans.
While mortgage loans can seem a bit confusing at first, you'll find that they aren't nearly as bad as they might seem once you've taken the time to learn more about the mortgage loan process.
While this is by no means to be considered a complete list of everything that might come up while shopping for a new home, you'll find below a brief guide to the process of shopping for a home and applying for a mortgage loan.
Searching for a home
The first part of buying a new home is, obviously, finding the home to buy. While there are obviously a large variety of homes available on the market today, it's important to make sure that you stay within the range of what you can afford. After all, you're going to be making...
A Guide to Buying a New Home
Mortgages > A Guide to Buying a New Home