Home Equity Loans Process | Personal Finance Blogs ...

When you begin window-shopping for a home, you will soon find out that the number of houses available is almost outdone by the number and variety of home purchase loans available. Every year, lenders come up with new and innovative ways to package mortgages. They tweak them with complex interest rate schedules, they simplify them with basic low-cost approval and closing processes; and they trick them out with bells and whistles that are the latest up-to-date version of the reinvention of the wheel in terms of home purchase loans.

Doing Home Purchase Loans Research
Yes, it can be overwhelming. But no, it doesn?t really have to be. To shop for home purchase loans without getting bogged down in frills and dog and pony shows ? and without wasting time with mortgages that are not appropriate for your particular needs ? it is a good idea to first do some homework.

Talk to a mortgage advisor, or visit the Internet and research basic articles about how the mortgage business works for consumers looking to purchase a home. Familiarize yourself with the basic jargon, and the basic types of mortgage loans. Once you are up to speed enough to understand the mortgage loan process, the difference between an ARM and a fixed rate, you will also be well on your way to knowing the difference between paying an arm and a leg and getting a bargain.

Frequently Asked Questions

1. QUESTION:
   Should i refinance my home or process a home equity loan to borrow money?
   I would like to borrow money from my home (175k balance due and 800k value) to pay off another home of mine.

   San Jose, CA

   • ANSWER:
     Do a home equity line of credit( with a reputable company). You will have access to a great deal of money, yet you only have to make payments on the amount taken from your line of credit. Interest rates can fluctuate with this, however you can generally lock in rates up to three times.

2. QUESTION:
   What is a home equity loan and what is the process to applying/being accepted for one?
   I paid roughly ,000 for my home. It was a TLC home and I?ve fixed it up in the past 9 years dramatically. New roof, new walls, siding, porch, heating system, well etc. My home and property was valued at 5,000 last year. Does equity play a part in this. Am I eligable for an equity loan? I don?t want to go into it without fully understanding what it is?I also don?t want to go to my banker with stupid questions?.Another thing. Im looking to build my own home?hence the loan inquisition.

   • ANSWER:
     Let?s say you owe around K for your house & it now appraises for 5K, 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 4,000.

     & 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)

3. QUESTION:
   Can i get a home equity loan? And what is the process?
   I heard that there are closing costs on home equity loans. Is this the case? Also i just bought my house in September and was told i dont have any equity in my house. Though houses of same model and square feet are selling for more.

   • ANSWER:
     Home loans always have closing costs. These include the appraisal fee, the lender?s attorney?s fee, the prorated taxes, the filing fee, the survey charge, insurance, and about half a dozen other fees. Sometimes those fees are included in the principle of the loan; they are rolled into the loan.

     The only equity you might have is the down payment you made when you bought the house. You should have a sheet 8?? x 14? if you live in the U. S. It will show the price of the house, the closing costs, the amount financed, and possibly your equity. If you have trouble reading it, contact your real estate agent. He can help you interpret it.

     When you make payments on your loan, you?re paying almost all interest for the first couple of years. You will probably reduce your principle by ? during the first 6 months of payments.

4. QUESTION:
   Can someone explaine home equity loan to me explaine the process and how does it work and what are the qualifi
   cations for this loan.

   • ANSWER:
     A home Equality load is basically your borrowing against the value of your house. for example if your have a mortgage say 100k left and your house values at 250k then you have a equality of 150k most likely get up to 50% of that. anyways it works the same way as a morgue just your borrowing against the value of your house.

5. QUESTION:
   Can you still apply Home Equity Loan even thoght your in the process of foreclosure?

   • ANSWER:
     When you are in foreclosure, the lender in the 1st lien position is going to take your home and all your equity. Any 2nd mortgage (current or future) risks losing everything. No lender (not even a private lender) will risk lending you money on a 2nd mortgage, unless they are willing to pay off the first mortgage and take the 1st lien position. What you should be looking for is someone to refinance your entire loan. You will need a minimum of 25% equity to qualify and you should expect a rate from 10 to13%. If you dont have 25% equity, you lender may consider a ?short sale? or ?short payoff?.

Source: http://mysurefinance.com/home-equity-loans-process/

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