Home equity Loan

Home equity Loan questions and answers

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Q: Is it better to get a home loan thru home equity line loan?
I am thinking of refinancing and Chase Bank is ready to give a 10 yr 170k home equity loan. Is this a better than my existing home mortgage loan. Is there anyone who has suggestions for this.

A: Typically home equity loans have variable interest rates ... the very same type of rate programs that a causing the havoc in the current banking and real estate market. If your rate is fixed for the term, you will have predictable payment streams that you can budget for. If the rates are variable, and the underlying market rate goes up again, you may be asking for trouble. Try to get low fixed rates that you can pay off as quickly as possible. Having your largest asset at risk in case you experience job loss or other financial loss really sucks ... believe me, I speak from experience.

Q: Can my wife take a home equity loan for personal use on a jointly owned home without my consent?
My wife earns more money than me. The home loan is in her name but the home title is in our joint names. Can she take a home equity loan without my consent?

A: If your home deed is in both your names, then no, she cannot take out a loan in only her name without your consent. She can only take it out in only her name WITH your consent legally. If your mortgage company has done this.. then they did something incredibly illegal. You need to call the mortgage company on this.. Best Wishes!

Q: Home equity loan or refinance existing home loan?
My husband and I are looking into a home equity loan or refinancing our existing home loan. We own a doublewide on 4 1/2 acres that has been converted to real property. Which is better? A home equity loan, or refinance our existing loan? Where do we start? What should we know? And what we should be careful of?

A: 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

Q: Can I pay off a home equity loan with my credit card ( lower interest rates!)+ how do I do it?
I have an offer from a credit card co with a low interest rate, 2% lower than my home equity loan interest. I would love to get rid of the horrible 8.75% home loan interest on $12,000. What to do?

A: How long is that credit card rate good for? Bet it is less than a year. What are you going to do at the end of that time? Trouble ahead!!!!!!!!!! Why don't you look for a better home equity loan rate? In fact, you may be able to get the current lender to lower the rate with no cost. Contact them, tell them you are going to refinance the loan but want to give them the opportunity to keep your business at a lower rate. I've done this twice before so it can happen.

Q: can i get a home equity loan on a home i just bought that i was gifted equity in it?
we are buying a home from my mother. she is gifting us the equity in the home. can we get an equity loan at the same time as we get our home loan or do we have to wait and how long?

A: The short answer to your question is yes - you should be able to get a home equity loan as long as you do not mortgage more than the appraised value of your home. There are are factors that determine your ability to get a home equity loan (credit, income, financial history, etc.), so I recommend talking to a trusted mortgage professional. Get referrals from friends and family for a mortgage company they've worked with. Once you have a full analysis done, you can get a good idea of what you'll qualify for. However, be careful about taking on more debt than you can handle. You may want to get the house, see how the bills work out and how many expenses you have and then look into getting a loan. If you know for sure that you'll have no problems handling the debt and you need the money, you should be able to get the loan. Rules for home equity loans at the time of purchase have changed recently because of problems with foreclosures and subprime loan defaults. Your mortgage professional will go over all of this with you. Good luck with your new home.

Q: What is a home equity loan and what is the process to applying/being accepted for one?
I paid roughly $90,000 for my home. It was a TLC home and I've fixed it up in the past 9 years dramatically. New roof, new walls, siding, porch, heating system, well etc. My home and property was valued at $275,000 last year. Does equity play a part in this. Am I eligable for an equity loan? I don't want to go into it without fully understanding what it is--I also don't want to go to my banker with stupid questions....Another thing. Im looking to build my own home--hence the loan inquisition.

A: Let's say you owe around $70K for your house & it now appraises for $275K, you can "cash out" some of your equity. Equity is the difference between what you owe & what the home is worth or appraised at now. There are many programs for "cashing out" equity. You could get up to 100% of your equity out. I do not suggest this &your interest rate on your equity loan will be a lot higher. You could cash out say 80%, based on my #'s above that would total about $164,000. & you could use this money towards a down payment & for construction costs with the home you're interested in building. You want to make sure you're using your money with the best programs. Talk to a lender who will show you the pros & cons. Don't use all of your liquid cash to sink into building a home, leverage, leverage, leverage & talk to the lender about a "Construction to Perm" loan. (Construction to finished product)

Q: How does a home equity loan work?
I need to know all the details and if it is a good choice. I have payed off my vehicle and credit cards and have none, but I have alot of student loan debt. Our dilema are the student loans. And paying them. I have heard about home equity loans and heard about being tax deductible. How do they work? Do they look bad on your credit? How much can you borrow ? Does it add to the years to pay off your house? We only have eleven years left to pay as it is right now. Just wondering what is a good option. I even thought that after I graduate and am working that my pay checks can go all to my student loans. I am just looking for some good ideas without having to stress out about debt and bills and such. We are trying to pay our bills off and so far have done good. But those student loans are looming in the background.

A: I'm not sure why you would want to get a home equity loan to pay off student loans. Typically interest rates on student loans are much lower than home equity loans. It is true that you can use interest paid on a home equity loan as a tax deduction, but you can also use interest paid on student loans as a deduction.

Q: How does home equity loan qualification works if you’re self employed?
I am self employed and want to get qualified for home equity loan. What are the qualifications lenders look at. What do I need to show them and have? Been trying to find out on the net, but can find any good resources. If you know any and dont mind sharing would be awesome. Thanks!!!

A: You will most likely be required to show two years of IRS filings to prove income. Everything else is basically the same as applying for a first mortgage - house appraisal, savings/checking account statements, credit reports and scores, etc.

Q: How do you pull equity out of your home with taking a how equity loan out?
First of all how do you build equity in a home? How do you report the equity to your lender? And lastly how to you pull the equity that you’ve built up out of the home with out taking a home equity loan out? Thank you in advance for any help that you can give me.

A: To build equity in your home you must either pay down the mortgage or have the market value go up. Your lender will decide if you have equity in your home. They decide how much your home is worth then they deduct how much you owe the difference is the amount of equity that you have. Lastly, I hate to tell you, their are only three ways to get equity out of a home. 1) Get an equity line of credit. 2) Refinance, and pull some money out. 3) Sell the property.

Q: What exactly is a home equity loan and can I still get one with bad credit?
I do own my own home but am still paying off my mortgage. My son needs more money for college and we've tapped out on student loans and my credit cards are all maxed. I was wondering what I could do and thought that a home equity loan with bad credit might be an option. I don't know if it's a good idea though.

A: When you take out a home equity loan, you are basically borrowing money and putting up your house's equity as collateral. It's like any other loan but this kind states that the lender can take your home, in very plain terms, should you default on your loan. When you're looking for home equity loans, bad credit shouldn't stop lenders from giving one to you. It doesn't sound like you're in too good financial standings so make sure that you will be able to pay back the loan because losing your home would not make your situation any better. I sincerely recommend you spend at least a day budgeting out the next few years of your life in preparation for this new loan. On the bright side, it will be a much better lending rate than other high interest rates in which only your credit is offered as collateral, but the stakes are higher for failing to pay. I do think that your sons college education is a great reason to take out a loan though. If you have to make some sacrifices to make it happen and pay the loan back, I think that you probably should. Get your kid to help pay the loan back after he's graduated and making money; the odds are that the loan will still be around then.

Q: Can you change a home equity loan to a personal loan?
My brother-in-law took out a home equity loan and he went to refinance his house and for whatever reason the house did not appraise for what it needed to partly because of the home equity loan that he already had. He was told to pay off his home equity loan and come back to refinance his house. Is there anyway that he can change his home equity loan to a personal loan? Or would that even help? please help. thanks.

A: Sure, but an unsecured la will have a rate of 2% higher attached to it. Based on what you're saying the brother-in-law has enough debt already.

Q: Is the interest on $200k home equity loan used to buy a new primary residence deductible on Sch A.?
We are planning to rent our existing home and pull $200k equity from that home to buy a new primary residence. I am not clear about the $100k deductible limit on the home-equity loans. Can I deduct it on Sch A or against the rental income and is the deductible equity loan capped at $100k. We file married jointly and our AGI is $160k.

A: The loan is on the rental property, stupid move, as now you have full capital gains tax, but that is not your question. The interest is not applied to your primary home, but to your rental.

Q: What is the difference between a mortgage and a home equity loan?
I own a home that is paid off but would like to take out a loan to fund some home improvements as well as help my parents pay off their home equity loan. Given this scenario can I take out a mortgage since mortgage rates are lower or am I limited to a home equity loan. I'm not interested in HELOC's.

A: Just the packaging of the financial product. Once upon a time Home Equity Loans were called 2nd mortgages. The real difference is risk factor for the bank. Typically Home Equity Loans are 2nd to be paid in the event of a foreclosure or other bad financial happening - leaving them exposed if there wans't any many for them at the end of the day. So they charge you a bit more interest to compensate for this additional risk. Since you would be leveraging your house for the 1st time again, and the holder of this new "note" would be the only creditor and thus 1st in line for payment in the event of default, lenders may negotiate a little and get you a better rate. Its probably something you should take to a local bank or branch where you can work with a real person. I wouldn't advise trying to work this deal through an online lender.

Q: What is better, home equity loan or line of credit on home I own outright?
I just finished building my house and I have no mortgage or anything as I had enough cash to buy the land and build outright. But, I have no money left to landscape and have some medical bills I would like to pay off. Can I get a home equity loan or line of credit on my house? Which is better?

A: A mortgage would be your best bet when it comes to a lower interest rate. Most banks have prepenalty payments on most of the equity type of loans. However the line of credits generally will not.

Q: Can I transfer an existing home equity loan, attached to my current residence to a new residence?
I took a home equity loan out a while ago and in this market, my equity has dropped considerably. If I were to sell my home, I could pay off my 1st mortgage, but I'd still have a balance of about $30,000-$50,000 on the 2nd mortgage. Do lenders transfer 2nd mortgages to a new home?

A: simple answer: no. especially in this financial climate. you would have to satisfy all liens on the first home when you sold it, which includes the 2nd mortgage. otherwise, the title is not clear and the deal will not go through.