home equity loan
Using Your Home’s Equity for Retirement
November 5, 2009 by Liz Miller · Leave a Comment
When it comes to retirement, we plan and plan and still have questions. One of the top questions for homeowners when it comes to retirement is what should we do about the equity in our home? Therefore, I thought it important to cover that in my current blog since there’s not a lot of information about it.
The equity that you have in your home represents a large part of your wealth. For married couples, your non-financial assets represent about 70% of your combined assets.
There are many financial planning programs available. However, many of them lack the ability to figure out what role housing wealth should play in your retirement. When it comes to middle class Americans, housing wealth should play an extremely important part in financing their retirement. But, it doesn’t seem to be a primary consideration when they begin planning. Thus, there is a void of housing wealth in financial planning programs.
When it comes to homeowners who have 70% of their wealth tied up in their equity, there are a number of options for them to use that money for their retirement needs.
Here is a list of some of the options you have to unlock the equity in your home:
* Sell and downsize to a smaller home. This frees up funds for to invest or for an annuity purchase.
* Pay off the mortgage, if possible, to reduce overall expenses.
* Secure a home equity loan or secondary mortgage on the home.
* Sell your home. Invest the proceeds and then rent.
* Rent out extra rooms.
* Get a reverse mortgage.
* Keep the house mortgage free and let its value serve as an emergency fund if needed.
* Rent out your primary residence and live elsewhere at a lower cost.
Not every one of these options will be viable for one’s retirement plan, but they are presented to help retirees use the equity in their home when it’s time for retirement. In the meantime, researchers are working on new financial planning models that will include a way for homeowners to incorporate housing wealth in their retirement plan.
Just Call Realtor® Liz Miller for all Your Lake Havasu City Real Estate Needs
home equity loan
A Little Info On Home Equity Loans…
September 8, 2009 by Mortgage Align · Leave a Comment
Many people call the home equity loan as “the second mortgage” This is distinguished from a refinance home loan because it allows property owners, for example in Colorado, to borrow money by leveraging the home equity. The primary reason for the home equity loan is for certain tax changes to be accommodated or circumvented. The reason is, when a borrower from Washington acquired the new loan amount, and then he could use the interest rates of the new loan to subtract costs for his or her tax returns.
Types
There are two basic types of home equity loans or what was previously referred to as second mortgages. These are the fixed-rate mortgage loans and the LOC or the line of credit. We are reminded that the fixed-rate loans are the major source of refinancing cases particularly in New York and Virginia. The line of credit on the other hand will be discussed later.
LOC
When a bank, or a financial lender, and a mortgage borrower reached an agreement regarding a clear drawn ceiling on the maximum amount that the borrower can avail for his loan is what is referred to as the line of credit. The concept roughly resembles that of refinancing but one of the distinct benefits of the line of credit if you are a resident of Pennsylvania is that the borrower need not pay the interest for the LOCs that are not utilized.
Home Equity LOC
If the mortgage borrower in his or her transaction with a Virginia local lending institution had his property of home used as a collateral for the extension of a line of credit, then it is called as the Home Equity Line of Credit or more popularly know around New Jersey as the HELOC. In the event that the previously explained ceiling is reached then the borrower can decide how much credit he is willing to avail.
home equity loan
Why Should You Decide To Take Out A Refinance Home Loan?
September 8, 2009 by Mortgage Align · Leave a Comment
Equity means the amount that a property is valued over the money owed on it. The main benefit with a refinance home loan is to use the equity built on the house for different uses like remodeling, extensions, education, and travel. By refinancing you take a mortgage on the amassed equity of the home.
Why take this loan?
- Debt consolidation
- Lower payments
- Cash in hand
- Renovations and extensions better options
- Shorter term of loan
- Equity utilized in different forms
Looking at the variability of this loan, it’s no doubt that the popularity is high. Refinancing to this loan helps to lower the interest rate and shortens the term also. You can utilize your equity on the house by taking this refinance.
home equity loan
Common Refinance Home Loan Types
September 2, 2009 by Mortgage Align · Leave a Comment
There are various types of refinance home loan for the property owners. Some common loans are:
Adjustable Rate Mortgage / Refinance Home Loan:
The interest rate of these loans depend upon the financial index it is dependent upon and so after a fixed rate of interest for few years it starts to vary for the rest of the term.
Fixed Rate Mortgage / Refinance Home Loan:
These loans have a fixed interest rate for a particular period of time. So your budget can be calculated as the monthly installments remain constant.
Balloon / Refinance Home Loan:
This type of loan is repayable in the full amount when the term gets over. Generally a loan with the term of 5 to 10 years with a low rate of interest as found in ARMs loans.
Home Equity / Refinance Home Loan:
These fixed rate loans are taken on the equity that your property is valued at. They provide you with liquid cash so as to invest, renovate, education purposes. They have a fixed monthly payment and are basically safe.
Line of Credit / Refinance Home Loan:
A line of credit loan allows you to take cash on the mortgage. You can cash on the equity of the house. The monthly installments are of low interest. The advantage is that you can pay it back when you want.
home equity loan
Want to Keep Your Credit Line? Make Sure Have a Good Credit Score!
August 20, 2009 by mmarquit · Leave a Comment
Things are getting interesting in the world of credit. It used to be that anyone could get credit — even someone with a horrible credit score. Now, though, creditors are getting a little bit jumpy about extending certain credit lines to those with lower scores. And the definition of a low credit score is changing as well. Gather Little By Little offers this observation on how creditors view potential borrowers:
During the last year or so, banks and other lenders have been gradually raising the required credit scores for certain types of credit. Two years ago, consumers could easily get credit with a score above 680. Now, there are instances of credit cards being cancelled for folks with scores of 650 or even 660. In fact, the recent trend is that consumers are considered borderline until their score reaches 740!
While you can still get a credit card with a credit score of less than 700, it may not be possible to get other types of credit — such as a mortgage or a home equity loan — without a score closer to 720.
If you are looking for more credit, you might have to consider carefully, and take steps to improve your credit score.
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