Refinancing Your Home – 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} Home Equity Loans

Normally, home equity loans go up to 100{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c}. It is often even much less, since many lenders are averse to risk. However, there are still some lenders that offer the possibility of getting a loan that covers 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} of the appraised value of your real estate property.

 

Such loans are not meant for first time buyers. First time buyers often just need a mortgage that covers a significant portion of the purchase price. However, if you already have a first mortgage on your home and need more credit, then your best option could be a 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loan as second mortgage.

 

Another option is when you buy a house that needs urgent renovation. You buy it, for example, for $200,000. You can finance this amount with a first time mortgage at prime rates. However, if you need to invest $50,000 (that extra 25{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c}) for renovating it, what kind of loan should you take? A consumer loan has much higher interest rates than a 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} loan. The value of your home will also increase after you renovate it; therefore the debt will be much better protected.

 

The difference between a 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loan and other forms of credit is mainly the asset securing the loan. The credit line of a credit card doesn’t have any other form of protection for the lender than your income. For lenders offering a credit card, what counts is your good standing. That means, if you have a good credit score and a reasonable income.

 

Lenders offering a 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loan, however, normally will check your assets, your income and your credit score. 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loans are protected halfway through your assets and halfway through your income, besides your wish to keep your credit rating as high as possible. Therefore, it is important that you check your credit score by yourself before applying for a 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loan (or any other type of loan), since it is possible that some mistakes have crept into it or some information is not up-to-date anymore.

 

If you need the 125{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} home equity loan, then you will need to go shopping. As said above, not all lenders offer it, since it means a higher risk than common mortgages. But the problems don’t stop there. There is also a higher diversity in conditions and clauses of the loan and you will have to read carefully the small print.

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