Bridge Loan

Today’s article explains the equity way to close the financial gap between the new and the old homes’ mortgages.

A lot of people count on the money they are going to get from selling their current home to make a proper down payment on their new home and start a new mortgage. Unfortunately, many properties get stubborn at the point and refuse to sell while their owners are gradually getting frustrated at somebody else snatching the perfect home right from in front of their nose.

The frustration can be avoided in several ways, including financial aid from friends and relatives, or retirement accounts. If those fail, a bridge loan can certainly be of help.

A bridge loan is usually provided by the lender of the new home’s mortgage, but its collateral is the old home. Most bridge loans are Read the rest of this article »

August 30th, 2008 by Elena Romanova Articles, Home Equity Loans, Refinancing

Reverse Mortgage

A reverse mortgage can become a considerable financial aid to retired seniors, who live in a property they actually own. The equity accumulated in their homes can be converted into cash, but the title to the property remains with the owners.

The reverse character of the mortgage is a sort of a reverse playback of the regular mortgage you had before while buying your house out. You had invested a lot of work and money into your property when you were younger. Now you can count on something in return, if you want it. The usual purpose of such a deal is to supplement the decreased after the retirement income and attempt to maintain the habitual life-style without having to really deprive yourself of certain joys of life.

Reverse mortgages are only available to people over 62 years of age. As to other rather non-numerous limitations, they include the ineligibility of cooperative housing (in New York however, I hear they have developed certain plans for this type, too) and the amount of equity you have built in your home. There are neither income nor medical restrictions. Even if you still have some moderate debt on your regular mortgage, you may qualify for a reverse one, and actually use some of its funds to pay the former one off, for the reverse mortgage must always be in a first lien position.

You can choose the amount or the period over which Read the rest of this article »

July 9th, 2008 by Elena Romanova Articles, Home Equity Loans

Second Mortgage

  • Second Mortgage vs. Cash-out Refinancing
  • HEL & HELOC

    • A second mortgage is another (secondary and subordinate to the existing first mortgage) loan that you take out using your home’s equity as collateral. It provides you with cash, but it deprives you of the owned by the time part of your home, partially or completely. You have to start buying out your home practically all over again, this time on different terms - the terms of the second mortgage. What’s in the terms?

    The crucial distinction of a loan secured by home equity is that the cash acquired can be used for anything - a new car, college tuition, or a bagful of groceries. It is not limited to one purpose only, as most other loans.

    A second mortgage can be practically of any type. Some are easier to shop for, some are harder to find, but it’s all in your hands, backed up with your credit score. The complication factor is that a second mortgage is literally second in the queue for refund in case you default on your mortgage payments. The lender of the second mortgage will not have a cent of his money back until the lender of the first mortgage gets all that’s his first. Sometimes it is all that there is and there is nothing, or way too little, left to pay back to the second lender. This unavoidable risk of a second mortgage usually makes it more expensive through a higher interest rate in the lender’s attempt to compensate for a potential financial loss.

    The first lender may also take notice of your second mortgage activity and extend the period of your PMI payments on the first mortgage, if you had any.

    A second mortgage imposes certain risks on the borrower, too. Read the rest of this article »

    May 23rd, 2008 by Elena Romanova Articles, Home Equity Loans