Consider a home equity line of credit
May 13, 2008
Yes, it is hard to imagine that lenders still offer second mortgages even after the mortgage crisis that has been seen within the market over the past six months. Their are a number of major lenders that will still offer home equity loans and fixed second mortgages, up to 90 or 95% of your homes value.
So who should consider a home equity loan?
Anyone who has equity in their home and may have a fixed mortgage rate lower than six percent should examine both refinancing their entire mortgage or applying for a second loan. A good way to analyze this is through a blended rate assesment. With prime hovering near 5% most borrowers should be able to qualify for a home equity loan with very favorable rates compared to first mortgages. The major advantage is that home equity loans often come with reduced fees and you pay only on the balance you owe. If you are consolidating debt or adding a home improvement and the loan amount is less than 20% of your overall loan balance than a second mortgage/home equity loan may make the most financial sense. A good lender should help you navigate all of your loan options to make the best financial decision based on both your short and long term goals.
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