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Top 5 mistakes when getting home equity
Rates have historically never been better, so nowadays the temptation to borrow against your home equity is very strong. However, many homeowners unknowingly make costly mistakes.
Here are the top 5 mistakes people make when applying for a home equity loan.
Mistake 1 – Not Knowing The Difference between a Home Equity Loan and a Home Equity Line of Credit
A home equity loan is a one-time transaction that allows you to draw out all the funds available.
A home equity line of credit (HELOC) is open; you can choose a small initial advance against the full amount of the line; then reuse the line of credit as often as you want during the period that the line is open. Your monthly payment is based on the outstanding balance.
A general rule of thumb is: use a home equity loan when you need all the money up front; such as cash for home improvements, debt consolidation, or a large one-time purchase.
If you need ongoing access to cash and revolving credit a HELOC may be your best choice.
Mistake 2 – Taking a Home Equity Loan When You Plan on Refinancing Your First Mortgage
Many mortgage companies look at the combined loan amounts (i.e., the sum of the first and second loans) even when you are refinancing only your first loan. If you plan on refinancing your first loan the lender may require you to pay off both your first and second mortgages; or close your home equity line completely.
Check with your mortgage company to see if having a second loan will cause your refinance to be turned down.
Mistake 3 – Not Knowing The Hidden Costs
If you feel you must take out a home equity loan or open a line of credit it is important to know ALL the costs. With any loan secured against your property there can be hefty insurance costs, appraisals and other fees that can cut into your loan amount.
Mistake 4 – Only Applying at Your Current Bank
Many consumers apply for their home equity loan from their home bank. This can be a costly mistake.
As in any other type of loan, be sure to shop around for the best deal. Your current bank may not be able to give you the best interest rate or the best terms.
Think twice before deciding to use your local bank; you may find that there is another lender out there that can offer you a substantially more attractive loan program.
Mistake 5 – Not Checking Your Credit First
As in any type of loan, it is imperative that you get the best rates and terms. However, if you have credit problems it will seriously affect your ability to qualify.
In fact, if your credit is not the greatest you may have no choice but to use alternative lenders specializing in hard to place loans. The solution: Make sure you go with the bank or lender that provides the best rates for your type of credit whether good or bad.
There you have it. Avoid these 5 mistakes and you could save yourself hundreds, if not thousands of dollars when you get a home equity loan.
Strategic Capital Network is a licensed mortgage brokerage specializing in helping credit challenged homeowners qualify for home equity loans.
Payday loans: Ensuring financial satisfaction at ease
The waves of the recession are becoming hard to bear and on top of that the prior commitments would further make surely knot us in certain obligations. Here in this context, commitments can even be directly proportional to huge expenses. But, keeping in mind the global financial turmoil things might not be in your favour. Therefore, it can be assumed that perhaps you are also a prey to financial crisis. In order to crawl out of such a situation in a dignified manner, one has to lay his or her hands on the best alternative option. But, you can understand in such a situation, your senses refuse to give response and you fail to jump into a constructive solution. So, now what to plead in front of your relatives and friends or to find some other way out. The first option has to be driven out, as they are also the prey to the global financial turmoil and you can’t afford to put them in more problem. Thus, the second option has to be looked at. In such cases, the loans can be referred to as the best options for enjoying the sigh of relief. Furthermore, loans of every type have been formulated by the loan fraternity to ensure total satisfaction to the customers.
In this case, the payday loans would be the best option, which can be considered without any second thought at ease. Quite interestingly, this category of loans has further been enhanced under the banner of no faxing payday loans. This has been done basically to meet the requirements of the busy people who rarely find time to spare. These type of loans would further permit you to get your required loan amount without any hassles. You can even search the loan related websites to enjoy the Online application process. In such a process you can easily apply for the loan that appropriately suits all your requirements and that too without stepping out of your house. As a matter of fact, you can enjoy the facility from the comfort of your living or office room. Moreover, being faxless in nature all the complicated process of documentation can be ignored.
The faxless payday loans can be availed both by the bad and the good credit holders. In fact, if you are a bad credit holder, you can comfortably enhance your credit ratings by paying back the repayment amount within the specific period of time. Thus, this shows that credit ratings would not be a matter of hurdle in getting such payday loans. Most importantly, you can get such loans when you need money urgently and that too at a very steady pace. However, you are required to fulfil certain criterion to get these loans approved. The first and the foremost criteria would be, you must be or above 18 years of age. Secondly, you must possess a valid current saving/running bank account. You must also show a valid proof that you have regular source of income to establish the fact that you have the repayment capability. The repayment options are also quite flexible and at the same time very affordable. The terms and conditions of these loans would also never bother you, as they are obviously very comfortably affordable. However, one thing should be borne in mind and that is you must be cautious before getting involved in any type of loan. Act smartly so that you can easily reap benefits of no faxing payday loans in the long run.