So those borrowers who would like to refinance and pull “Cash Out” of your home but were turned down or told the home didn’t appraise for enough, there are some options which you can do fairly quickly to change your outcome.
1. Increase your credit score.
Often, lenders have a limitation on how much cash they can lend, many times, it may be due to credit score. For example, you may be able to borrower up 70% of your home’s value at a 640 score on a conventional loan, but if you have above a 700+ score, you may be able to go up to 85%
2. Apply for a renovation loan.
Many borrowers just want the cash for home improvement, unaware that a renovation loan is what they need. In some cases a renovation loan appraisal can yield a much higher value because it can value the home, “subject to” the improvements being done which is rare. Due to the their technical nature, a renovation loan isn’t common. However, they can be well worth it, with the right circumstances.
3. Apply for a HELOC
A HELOC is a Home Equity Line Of Credit. This is technically a 2nd mortgage but has a lot more flexibility to pull cash out and repay. They also can go to a higher Loan-To-Value than most other products.
So, what do you do if this is you? Like anything when you are dealing with professional services…get a second opinion and ask them about any of the above options.
Of all of the mortgage products on the market, today we’ll talk about a Home Equity Line of Credit or HELOC – what is, how it works, benefits vs. drawbacks and if it would be right for you.
What is a HELOC?
A HELOC is a revolving line of credit that your home secures. Think of it a cross between a credit card and mortgage, only with a lower interest rate because your home secures the underlying debt. An additional benefit is since the debt is secured by your home, the interest is tax deductible. Continue reading “When is a HELOC Right for You?”
A family’s most valuable asset is their home. Many homeowners use a Home Equity Loans or a Home Equity Line of Credit (HELOC) to finance big ticket items like a child’s college education, home improvements and even medical bills. If you are considering a HELOC, you’ll want to take advantage of the best credit terms without subjecting yourself to any undue financial risks since inability to repay the borrowed amount plus interest could cost you your home. Here are some things to consider.
It’s important to understand the difference between a home equity loan and a Home Equity Line of Credit. With a home equity loan a lender agrees to loan a maximum amount for an agreed upon time period (a term) with the borrower’s equity in his or her home as collateral. Equity is the amount of money you would receive after selling your home and paying off the mortgage. Home equity loans provide homeowners a one-time advance with specific monthly payments and a specified time frame for repayment. Home equity loans are a convenient way to borrow money because of flexible terms and competitive rates.
Continue reading “What You Should Know about a Home Equity Line of Credit (HELOC)”