Financing Home Improvement Projects: After The Credit Crunch?
Do you want to finance home improvements?
Does your kitchen need remodeling or do you want to add a deck to your house?
You can often finance your home improvements through your current lender as a rider to the loan. If you have significant equity in the home, you can get a second or home equity loan.
Seconds, also known as home equity lines of credit are your best bet for financing home improvement. However, it is more difficult to get these loans in the current economy because there has been a credit squeeze. Countrywide, which financed many second mortgages, failed as an institution.
Still, if you have decent credit and you can show that value will be added to the bottom line of your home, you should be able to go about financing home improvement projects that you wish to undertake.
Categories: Home Improvements Tags: home equity, home improvement, mortgage credit, mortgage refinance, mortgages
Using House to Consolidate Debt?
Re-Financing Your Mortgage to Consolidate Debt
Some homeowners opt to re-finance to consolidate their existing debts. With this type of option, the homeowner can consolidate higher interest debts such as credit card debts under a lower interest home loan. The interest rates associated with home loans are traditionally lower than the rates associated with credit cards by a considerable amount. Deciding whether or not to re-finance for the purpose of debt consolidation can be a rather tricky issue. There are a number of complex factors which enter into the equation including the amount of existing debt, the difference in interest rates as well as the difference in loan terms and the current financial situation of the homeowner.
This article will attempt to make this issue less complex by providing a function definition for debt consolidation and providing answer to two key questions homeowners should ask themselves before re-financing. These questions include whether the homeowner will pay more in the long run by consolidating their debt and will the homeowners financial situation improve if they re-finance.
What is Debt Consolidation?
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Categories: Refinance Tags: debt consolidation, Home buying, home equity, mortgage financing, Mortgage loan, mortgage refinance, Refinance, Refinancing
The Pitfalls of a Reverse Mortgage
Reverse mortgages can be a blessing and a curse. If you have a large amount of equity in your home, a reverse mortgage can be a valuable way to take advantage of that equity and use the money for whatever purposes you want. Many older homeowners have done just that, and are enjoying the results from it. However, there are many things to keep in mind when considering a Reverse Mortgage. Too often, a homeowner will make a drastic mistake and end up frustrated, instead of enjoying life as they ought to be. Here are some reverse mortgage pitfalls to remember.
To start off, you should never take out a reverse option mortgage for more money than you need. If your home is valued at $75,000, do you really need all of that money? Sure, you could pay cash for a new car or go on vacation all year, but do you really need to? You need to sit down and consider why you want a reverse mortgage before you get one. There’s no shame in taking advantage of the equity in your home, but if you’re just going to waste it all, then you’ve made a rather foolish move. The saying is still true: Don’t borrow more than you need.
Secondly, a reverse mortgage pitfall to avoid is obtaining the money in one large lump sum. While it’s quite tempting to have that large golden egg dropped into your lap, it’s much wiser to get the money over time. Why is this? You shouldn’t opt for a lump sum because the lender charges a lot of money for it. It’s a large hardship for a lender to pay you tens of thousands of dollars all at once, and they make up for it by charging sky-high interest rates and other fees.
Categories: Mortgage Types Tags: home equity, home loans, mortgage market, mortgages, Refinance, residential mortgage, Reverse Mortgage