Comments on: What is a home equity loan and what is the process to applying/being accepted for one? http://nxus.net/what-is-a-home-equity-loan-and-what-is-the-process-to-applyingbeing-accepted-for-one.html Solution to your Niche Question Sat, 15 Oct 2011 00:02:34 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Emily_Knell http://nxus.net/what-is-a-home-equity-loan-and-what-is-the-process-to-applyingbeing-accepted-for-one.html/comment-page-1#comment-2306 Emily_Knell Sat, 03 Oct 2009 22:07:23 +0000 http://nxus.net/what-is-a-home-equity-loan-and-what-is-the-process-to-applyingbeing-accepted-for-one.html#comment-2306 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) 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)

]]> By: Mortgagemom http://nxus.net/what-is-a-home-equity-loan-and-what-is-the-process-to-applyingbeing-accepted-for-one.html/comment-page-1#comment-2307 Mortgagemom Sat, 03 Oct 2009 22:07:23 +0000 http://nxus.net/what-is-a-home-equity-loan-and-what-is-the-process-to-applyingbeing-accepted-for-one.html#comment-2307 An equity loan is a loan against the difference in your home's value and any outstanding liens you currently have (like your 1st mortgage). The new equity loan takes a 2nd lien position to your 1st mortgage and is sometimes called a second mortgage, which is the same as an equity loan. Some banks and direct lenders require "seasoning" which means you have to own your home for sometimes 12 months before you can use the new value. Therefore I recommend you seek the assistance of a mortgage broker. Brokers work with several different lenders and will have options available to you right now. They can also explain the various types of equity loans available and can offer rates that are the same or lower than local banks. They also have several "no-cost" loans as well. Since you're looking to build a home, you may not need all your equity out at once. I recommend an equity line of credit where you can borrower and pay for only what you need when you need it. Equity lines can be fixed or variable, have interest-only payments or include principal payments. Again, talk to your local broker to get all the details. An equity loan is a loan against the difference in your home’s value and any outstanding liens you currently have (like your 1st mortgage). The new equity loan takes a 2nd lien position to your 1st mortgage and is sometimes called a second mortgage, which is the same as an equity loan.

Some banks and direct lenders require "seasoning" which means you have to own your home for sometimes 12 months before you can use the new value. Therefore I recommend you seek the assistance of a mortgage broker. Brokers work with several different lenders and will have options available to you right now. They can also explain the various types of equity loans available and can offer rates that are the same or lower than local banks. They also have several "no-cost" loans as well.

Since you’re looking to build a home, you may not need all your equity out at once. I recommend an equity line of credit where you can borrower and pay for only what you need when you need it. Equity lines can be fixed or variable, have interest-only payments or include principal payments. Again, talk to your local broker to get all the details.

]]>