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Home or Investment Property Equity: Be Sure the Bank Gives You All that You Deserve
Home equity is your own personal money machine. If you want financial freedom, a home equity loan is probably the best way to achieve it. You can pay down credit cards, pay off cars, both at high interest rates, or you can actually use your home equity to invest and build the money into a fortune. The biggest problem people run into with home equity is that they don't have enough of it. Sometimes, the problem may be with your bank and not with your equity.
In order to know how much equity you have in your home, you must first know what you owe on your mortgage and then how much your home is worth. Here's the secret to getting the most equity out of your home or investment property. Let's say you own $100,000 on your home or investment property, and you believe it is valued at $150,000. If a bank will loan 90 percent of the value, they'll give you $135,000 minus what you owe, or a $35,000 equity loan.
But wait just a minute. Let's suppose the bank tells you that they believe your home is valued at $130,000. Now, they'll give you a home equity loan of just $17,000 (117k minus the 100k that you owe). That's a whopping 18k less than what you thought you were getting.
The answer? Educate your lender. This happened to me recently. The lender had my home valued at $15,000 less than I said it was. So, instead of giving up on my home equity loan, I simply educated the lender. I explained that I $25,000 in simple appreciation, based on the 4 percent that homes in my neighborhood receive. Then, I said I had $12,000 worth of improvements in the past two years. Finally, I asked for a complete appraisal, instead of the recent sales in the neighborhood that the bank was using. Now, this increased my closing costs a bit, but it was well worth it. In fact, a couple of days later, the lender called to inform me that the full appraisal came in $7,000 higher than the number I gave them. Now my equity loan was even bigger than I had originally hoped ? 90 percent of 7k gave me an additional $6,300!
You see, our instinct is to always trust that the lenders and mortgage brokers know more than we do. In many cases, this is not true.
Mark Barnes is an investment real estate and real estate finance expert. Get his free mortgage finance course at http://www.winningthemortgagegame.com. Mark is also the author of the new novel, The League, a shocking, sports-related conspiracy. Learn more about his suspense thriller at http://www.sportsnovels.com.
Making Sense of Mortgage Speak
Applying for a home loan can be overwhelming. You will need to contend with mountains of papers, contracts, documents; and do lots of planning and coordination. Add to that a whole language unique to the mortgage loan process and you have the makings of an experience unlike any other.
What is a Reverse Mortgage?
Simply stated, a reverse mortgage is a loan that enables homeowners (age 62 and older) to convert part of the equity in their home into a tax-free income without having to sell the home, give up the title, or take on a new monthly mortgage payment. More and more homeowners are using this to supplement their retirement income, pay for health care, modify their home, or just get some cash for emergencies. Since this is a new product, some people have misconceptions of what a reverse mortgage is. The bank doesn't give you money and take your house. Let's look at some of the most common questions.
Refinancing and Car Finance - Is it worth it?
Refinancing and Car Finance - Is it Worth It?
Poor Credit Home Mortgage Loans - The Role of the FICO Score
If you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the FICO credit scoring system works.
A Guide to the Best Remortgage Deals
Finding the best remortgage deals isn't always easy, especially with the large variety of lenders available today. It can sometimes take a lot of research and time to locate the best remortgage deals for your home, though the end result is often worth it.
Mortgage Cycling ? Brilliant or Risky
With mortgage rates near 20-year lows, competition in the mortgage industry is fierce. It seems like every day a new mortgage loan strategy comes out that is suppose to be the best thing since sliced bread. Whether it's a mortgage with no closing costs or an interest only mortgage, everyone is claiming they can save you a ton of money. Now someone has come out with something called Mortgage Cycling. Mortgage Cycling could save you thousands of dollars or it could cost you your home.
Home Loans for Credit Challenged Borrowers
Just because you have negative items on your credit report doesn't mean you can't obtain a home mortgage loan. There are options for you. Bad credit is not the end of the world. It's true that getting a bad credit mortgage loan is not always the easiest or fastest mortgage loan out there, but you can still buy your own home even with bad credit.
Home Loans: Where Do I Begin?
So you've finally decided you've had enough of paying rent and want to jump into home ownership. Well you've got your work cut out for you. Plumbing problems are now your responsibility, not your landlord's. A nice, clean yard is also your responsibility, not your landlord's. The air-conditioning goes out in August, who do you call. Not the landlord, you're now responsible. Yep - a lot of work.
Refinance Home Loan and Refinance Home Loans
Refinance home loan lenders are eager to lend money to any individual regardless of credit as long as the homeowner has a fair amount of equity in the home and the home itself is in a condition that can be resold. Refinance home loans are different than a second mortgage or line of credit in that the proceeds from the loan disbursement first pay off the original mortgage loan. The remainder of the refinance home loan proceeds leaves the homeowner to spend the money as they wish. Typically, refinance home loans carry lower interest rates than purchase mortgages.
Why Choose a Remortgage?
A remortgage can be used for the purpose of gaining lower interest rates on your mortgage or raising finance through releasing equity.
6 Things to Consider Before Refinancing
Perhaps you're a homeowner in need of some quick cash.
Consolidate Your Debt With a Home Equity Loan and Improve Your Credit Score
A home equity loan is a loan based on the difference between what your current home value is and what you currently owe on your house. There are also mortgage companies that will loan a little over the equity you have in your home. They can usually do this safely because most homes appreciate in value over time.
Advantages and Disadvantages Of A Reverse Mortgage
Betty and John, are in their mid-seventies and are currently weighing the advantages and disadvantages of a reverse mortgage as a way of freeing up some cash. The couple purchased their home 45 years ago for about $14,000 since then home values have skyrocketed and recent single family homes in their neighborhood have been selling for a minimum of $160,000.
Home Equity Loans - How To Use Your Homes Equity to Consolidate Debt
If you've got a wallet full of credit cards, and monthly payments on them that total more than 25% of your monthly income, chances are that you've considered debt consolidation loans or some other means of taming your credit card debt. But did you know that a home equity loan is another way to get the money that you need to pay off your creditors, reduce your monthly payments, and get out from under the weight of all those monthly payments?
Home Mortgage Lenders - How to Find A Good Mortgage Broker Online
Mortgage lenders have set up shop online, but they aren't all reputable mortgage brokers. To find a good mortgage lender you need to compare rates and research to find reputable companies.
Home Loans For People With Bad Credit - When you Should Wait and When You Should Get a Home Loan
Home loans may seem like a bad idea for people with bad credit, but there are times when a home loan can help your credit score and your budget. To know if a home loan is best for you, consider factors such as your current financial situation, current rent payment, and future goals.
Reverse Mortgages Learn The Facts First!
Reverse Mortgages, Most Common Features:
Adjustable Rate Mortgage - How They Work?
How does an ARM work.
Flexible Mortgages - Offering Relief from the Fixed Mortgage
A pension mortgage may seem lucrative at the first sight. However, they seldom are, if the customers who took pension mortgage are to be believed.
No Money Down Mortgage Loans - Ways To Get Approved For a Home Loan Online With Zero Down
No money down mortgage loans enabled more people to own their own home. The following ways will help you get approved for a home loan online with zero down.
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