The Facts About Second Mortgages

Your home: It's probably your biggest asset. Having a home to back you up when you need a loan is one of the greatest advantages of home ownership. In recent years, there has been a major increase in the amount of people looking to use their homes as a way to get access to extra money when they need it most. One of the best ways to do this is through a second mortgage.

A second mortgage is exactly what it says it is - a loan made in addition to your first mortgage, and it's based on the amount of equity you have built into your home. Many people use them to fund home renovations, to pay off credit cards, or to put a child through college. Since you've already been through the process once, the underwriting required to get a second mortgage is much simpler than it was the first time around, and the cost of the transactions involved will be significantly lower. This usually makes up for the fact that interest rates on the second mortgage are a bit higher than they were on the first one.

On a second mortgage, you will borrow a fixed sum of money against your home equity, and pay it back over a specified amount of time. The amount you borrow will be combined with the amount you still owe on your first mortgage.

It all sounds pretty simple. There are just a few things to keep in mind. First of all, don't take out a second mortgage on your home unless you've built up a fair amount of equity in the property already- that is, made payments on the original mortgage balance for a good amount of time. You may still be able to get a second mortgage if you don't have much equity, but your rates will be so much higher, and the amount you can borrow so much lower, that it will essentially be a waste of your time and money. This is one of those things that is worth waiting for.

Also, look into the other options of borrowing against the equity of your home, including a home equity loan and a home equity line of credit. All of these options allow you to borrow against your equity, but there are slight variations among them that mean one of the three may be the best option for you. It will depend, for the most part, on your particular financial standing, the amount of money you need to borrow, and the amount of home equity you currently have.





About the Author:

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find all the different loan types explained.
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The Truth About Home Improvement Loans

Are you planning to stay in your home for a long time, but you aren't quite satisfied with the
look of your home? Do you think your home could use new cabinets in the kitchen? Perhaps your house
needs a new roof or new carpets? Or maybe you think your house needs a new bathroom? If you are
thinking like this in anyway, you probably need to look into home improvement loans. Home improvement loans are what people use to make improvements such as these to their home. If you are unsure about this subject, there are some things you should know. Please continue to read for the truth about home improvement loans.

Most home improvement loans are often FHA loans that are commonly insured because they are used to
improve a home or rehabilitate it so it revitalizes it in an aging neighborhood. In essence, home
improvements are seen as a good thing where lenders are concerned. But home improvement loans can
be costly. Most home improvement loans are done through a home equity line of credit or home equity loans. Some are even done with a second mortgage. This, in reality, costs people a lot more money. When you get your home improvement loans in this manner, you are actually getting the money from your equity... money you have already put towards paying off the house. This means you are basically starting all over and paying for the house all over again.

There are many factors to consider when you search for a lender to get the home improvement loans
from. Before you start, make sure your credit score is as good as it can possibly be. Next, when getting home improvement loans, try to search for the one with a low fixed rate. Variable rates tend to change quite often and thus cost people more money in the end. Also, when searching for home improvement loans, look into the ones that will get you the cash when you need it. Some lenders take an awfully long time to get you the money you are asking for. Lastly, when looking for home improvement loans, search for the ones with the best deals. Some lenders offer no appraisal fees and no lender fees. This will in turn save you a bit of money.

This is some of the important things you need to know when you decide to look into home improvement loans. You want to make your home beautiful, but be sure you do it in the cheapest manner possible. With careful research, you should be able to find the right home improvement loan for you that will save you money in the end. You can then look forward to having a lovely home!





About the Author:

Tripp Taylor offers expert advice and great tips regarding all aspects concerning Loans. Get the information you are seeking now by visiting http://www.loanscentral.info
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Trendy Indiana Mortgage Refinancing and Second Mortgage Programs: A Brief Review

The combination of rising interest rates (although still historically low) and rising home prices has caused the robust mortgage market to slow from its record pace. This has motivated Indiana lenders to either introduce creative new loan products or to more aggressively market existing products. If you have not shopped for a in a while, you will find numerous new products from which to choose. Following is a brief review of some of the new and popular products available today.

Interest Only - With this loan program you are paying only the interest on your Indiana mortgage and are not paying any principal. This reduces your monthly payments and can allow you to afford a larger home or save more money on a mortgage refinancing or home purchase loan. If used carefully, you can also free up cash flow that can be used for investment purposes or to pay down high interest rate debt.

Negative Amortization - These are often marketed using the phrase "option arm" or "choice mortgage". With this loan type, your payment does not cover all of the monthly interest. Often, your mortgage balance is increasing and the underlying interest rate is usually a monthly variable rate. These loans are used to dramatically reduce your monthly payment and can be used for an Indiana mortgage refinancing or home purchase. This program should be reserved for the more sophisticated borrower and it is important that you understand the terms of the loan. Click here for more information about Indiana Mortgage Refinancing and Indiana Second Mortgage Solutions.

40 Year Amortization - Rather than paying off in 30 years, this loan pays off in 40 years. As with the Negative Amortization and Interest Only, this program is used to reduce your monthly payment.

Stated Income / Reduced Income Documentation Loans - There are a variety of these loan products available, but they are primarily used to for individuals with difficult to verify income. These can be used for Indiana Mortgage Refinancing, Indiana Second Mortgages and Home Purchase Loans. As lenders have become more comfortable with credit scoring, these products have become very popular. Essentially the lender is relying on the credit score for their loan decision. They realize that borrowers with higher credit scores will pay their mortgage and they do not need to fully verify their income.

ALT A Programs - The "ALT" is short for Alternative and the "A" refers to the borrower category. These are categories of mortgages that fall outside the more stringent guidelines of Fannie Mae and Freddie Mac. Generally these mortgage refinancing programs allow for more flexibility with regards to loan to values and income documentation requirements and can be used for home purchase, mortgage refinancing and second mortgages.

Hybrid Second Mortgages - Traditionally, your options for an Indiana second mortgage were either a fixed rate, fixed term loan or a variable rate, open ended line of credit. Now, you can have the benefit of both. You can start your second mortgage as a variable rate home equity line of credit and then lock in all or a portion of it to a fixed rate for a fixed number of years.

About the author:

Chris France is a professional mortgage planner with over 10 years lending and banking experience. For additional questions or comments about this article, please contact Chris France at American Mortgage Funding Corp or christopher.france@branch.cfic.com or 1-800-943-9472.

Unsecured Debt Consolidation - Tips For Getting A No-collateral Loan

Getting an unsecured debt consolidation is not easy, but possible. For the most part, banks and other financial institutions are hesitant to loan money that is not secured by a piece of property. If you were to default on the loan, the lender is unable to recoup their lost. However, some lenders are willing to offer unsecured debt consolidation loans. To obtain such as loan, you must be a prime candidate

Traditional Debt Consolidation Options

Typically, consumers would obtain a debt consolidation using their vehicle or home as collateral. This involved giving the lender possession of a vehicle title or applying for a home equity loan or home equity line of credit. In both instances, if you were unable to repay the loan, the lender could claim your home or car.

Today, many financial institutions are making it possible for consumers to obtain unsecured personal debt consolidation loans. These loans do not require collateral, which could mean a higher interest rate.

Getting Approved for an Unsecured Debt Consolidation Loan

If you are hoping to get approved for an unsecured debt consolidation loan, you must take steps to ensure that banks will consider you a prime applicant. Unsecured debt consolidated loans are not offered to just anyone. Because these loans are not secured, financial institutions are very cautious.

To obtain an unsecured debt consolidation loan, lenders require a very good credit rating. Hence, the key to getting approved for any type of unsecured loan is boosting your credit. To begin, check your personal credit report. Contact several lenders and inquire of their individuals requirements for obtaining an unsecured loan.

In most cases, lenders will require a minimum credit score. If you meet their lending requirements, request a quote. In fact, get quotes from at least three or four lenders. Unsecured loans may carry a higher interest rate. However, some lenders will offer comparative rates for top applicants. These consist of individuals with remarkably high credit scores.

Lenders rarely offer unsecured debt consolidation loans to people with fair or bad credit ratings. The odds of these prospective borrowers defaulting on the loan are much higher. For the most part, persons with a superb credit rating will not risk damaging their credit, which makes them prime candidates for unsecured loans.

About the author:

View our recommended companies for Unsecured Debt Consolidation or view all of our Recomm ended Debt Consolidation Companies Online.

WARNING: Many Home-Owners Could Be Living Above Their Means!

San Ramon, CA -- Federal Reserve Board Chairman, Alan Greenspan, commented best when he stated "Homeowners might have saved tens of thousands of dollars had they held Adjustable-Rate mortgages rather than Fixed rate mortgages during the past decade". If you own a 30year fixed mortgage, the first 10years of your payments will be applied towards paying down your mortgage interest; on average only 15% of your original principle balance will have been reduced. Considering the fact that most people will live in their homes approximately 5 to 7years, it makes since to plan what your goals will be before deciding on a loan program; your decision could affect your financial planning for the next 10years.

Statistically speaking, if you have a family of four (2 adults and 2 kids), a loan balance of $400K with an interest rate of 4.5% (4.642% APR), you'll need a Combined Yearly Income of $140,000 just to Almost Break Even each month; actually you could have a loss of approximately $478 per month.
Here's the breakdown: Income $140K per year x 35% (tax bracket) = $91K per year ($7,583 mo.) Monthly Expenses: $2,027 (Principle + Interest) + $417 (taxes) + $117 (home insurance) + $1K (2 car payments) + $800 (food) + $500 (health insurance) + $2K (family of 4 living expenses) + $300 (student loans) + $300 (credit cards) + $600 (childcare services) = $8,061 Total Expenses. These figures don't include any increases from your local county assessor's office, car repair bills, cost of living increases, cable or satellite services, utilities, etc.

Rather than considering shorter termed loans (with more favorable rates and payment options), the customer will keep their existing loan (they like the current low rate) and take out a Home Equity Line of Credit.
Currently our economy is prospering; this good news creates a rising Prime Rate, which increases the payment rate on your Equity Line of Credit. Some people are using their Equity Line of Credit accounts in order to maintain their current standard of living. One of two things will eventually happen: a) The client will have to prematurely sell their home because they can't afford the payments or b) The client will maximize their existing equity and be forced to make higher payments; this scenario has the possibility of a foreclosure waiting to happen.

In addition to establishing your goals and determining the right loan program, you should also understand the character of a real estate investor. Treat your property as an Investment and NOT a Retirement! Learn to use your equity as leverage in order to obtain greater wealth! Ask yourself what are you trying to accomplish with this transaction? In our opinion, "rate shopping" is the old process for selecting a mortgage loan and it should be replaced with "payment shopping". Did you know there's a loan program available that may have a higher interest rate than you currently have, but provides you with a lower monthly payment (plus extra monthly cash-flow), and no negative amortization? Also, don't view negative amortization as a dark cloud in terms of loan programs; depending on how long you plan on staying in your home, this lower payment option could be a blessing in disguise for the true Real Estate Investor.
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About the Author
Brisco & Associates is a growing company that offers services in the following categories: Mortgage Consultation, Contract Mortgage Processing, and Mortgage Education. Dwight Brisco can also assist your mortgage financing needs in 46 states. Visit our web site at http://www.freemortgage-info.com, select FREE Reports, and sign up to receive more information. Dwight Brisco is licensed (01380942) by the California Department of Real Estate.