Tag Archives: home equity loan
Ways To Secure Yourself For A Financial Emergency
One of the wisest moves is to make preparations for any possible financial emergency. Financial experts advise everyone to set aside a certain amount of funds that is enough to last for a minimum of 6 months. Hence, if tragedy happens like loss of job, you have the assurance that you have emergency savings that can be used to cover for you and your family until you can get a new job or other means of earning your income.
Can it really be possible to save money without using paychecks? How can you be more prepared to face financial trials? Here, we’re going to discuss some tips to help you secure yourself for a financial emergency.
Open a checking account. Send a portion of your paycheck to your deposit account each month. Thus, you can have something to rely on during emergencies.
Take out a personal loan from a credit union. In case you need emergency money, you may turn to a credit credit union to ask for financial assistance instead of payday loan lenders. Compared to banks, credit unions have a more relaxed policy and lower interest rates for borrowers.
Seek credit counseling. There are certain credit counseling agencies which are government accredited. They offer counseling services for a lower cost. If you have problems controlling your expenditures or handling your credit card and other financial concerns, it’s best to ask for assistance rather than to let yourself get stuck in.
Watch your spending. The best way to save money despite having limited paycheck is to control your spending. To start with, one can make a list of all the monthly expenses and subtract it from your monthly salary. It may be important for you to make adjustments on your expenses to stretch your budget. This needs self-discipline on your part to avoid unnecessary splurges on luxuries.
Apply for insurance. Secure a home insurance, personal insurance, and car insurance. Medical bills can put you in debt in just a few weeks if you don’t have a health insurance coverage. So, it’s best to save a certain portion of your monthly salary for your insurance payments as part of your financial plan.
Take out a Home Equity Loan. Another source of emergency funds that you can use is the equity of your home. But, you have to be aware that an equity loan puts your property at risk. If fail to keep up with the payments, in the end, you’re most likely going to lose a home. Hence, it is important to consider all your options first if you have any plans of using your home equity for a loan.
Home Equity Loans without Equity?
Even if you havent built any equity on your home yet or if you need more money than the amount you have built on your home, you can get a 125% home equity loan that will let you get a quarter more money above your home value.
This means that if you just bought your home and you financed 100% of its value, you could still get 25% of its value from a home equity loan. If your home value is $200.000 this implies that you can borrow up to $50.000. If you have already paid 10%, you could borrow $70000 and so on.
Loan Requirements
In order to qualify for this kind of loans you need to meet certain requirements. Requirements are mainly associated with your credit score and history. Nevertheless, each lender has its own requirements and you can always consult with them weather youll be able to get a loan or not. Bear in mind that your credit report will be pulled so you might want to check everything is in order before applying as you may get declined and this will affect your credit score even more.
Additionally, your credit score will not only determine your eligibility but it will also establish the loan amount youll be able to request, the lending schedule and the repayment schedule. You wont always be able to receive the full loan amount in hand; you may get the money in 3 or 4 separate installments.
Some lenders require that you spend a certain amount of time living in that home prior to granting the loan. This period of time is not fixed and depends on your credit score and on the lender; some of them do not require it at all. But normally two months residing in the property is the minimum period of time required.
As regards to appraisal, most of the time, it can be bypassed. This is due to the fact that property values tend to be stable over small periods of time, and chances are that if youve bought the property or refinanced within a small period of time, theyll use the value concealed in that contract in order to calculate the new loan figures. This is almost always true if youve bought your home or refinanced within twelve months.
Perfect for home improvements
This kind of loan is a great option for those who didnt have enough money to buy a home and undertake house improvements at the same time due to the lack of funds. With a 125% Home equity loan you can get the finance needed to make house improvements without having to pay for high interest personal loans.
So if you need the extra cash and youve made up your mind, just search the internet for 125% home equity loan lenders and request loan quotes. Compare fees and interest rates, and once youve decided which option is best for you, apply for the loan. In a matter of days youll get approved and you will be able to get started.