2nd Mortgage - Better Than Refinancing
You have probably received refinancing offers in the mail or advertised online touting your ability to pull out your home's equity. But a 2nd mortgage, also called an equity loan, may be a better financing option than refinancing your mortgage. 2nd mortgages are ideal when you just want to tap into your equity, plan to move soon, or are unsure about the amount you want to borrow.Tapping Your EquityTapping into your home's equity is best done through a 2nd mortgage if you already have a low interest loan. Typically, applying for a 2nd mortgage requires fewer fees than refinancing a mortgage. 2nd mortgages are also paid back sooner, so your interest payments are less.Short-Term LoanWith the costs involved in refinancing, you typically need to keep the loan for about two years to break even.
However, with a 2nd mortgage you don't have those fees to worry about recovering. 2nd mortgages do have minimum balance and early pay off fees, but they are significantly less than refinancing fees.Flexible Loan AmountA 2nd mortgage allows you to take out your home's equity over the course of several years. The money can be accessed with a check, ATM card, or direct deposit, depending on how you set up your account with the lender. Additionally, you only pay interest on the money that you have withdrawn.Higher ApprovalLenders tend to be more lenient with approving 2nd mortgages. Since the amount usually is less than a traditional loan, lenders remain confident that they will receive payment.
If you have had a few credit glitches in the past two years, think about going with a 2nd mortgage.2nd Mortgage Mistakes2nd mortgages aren't for everyone. You should weigh the cost of PMI and payments when choosing your financing options. Borrowing more than 80% of your home's value will subject you to private mortgage insurance. Your monthly payments should also be a factor in your decision. By taking out equity when refinancing your home, you will have a lower payment than if you had both a mortgage and 2nd mortgage payment.
Also, if you refinance in the future, you will have to pay off your 2nd mortgage..
Carrie Reeder is the owner http://www.abcloanguide.com, an informational website about various types of loans. To view our recommended sources for 2nd mortgage loans online, visit this page: http://www.abcloanguide.com/mortgageloans.shtml40-Year Mortgages: An Alternative to Interest-only Loans?
Interest-only loans are quickly becoming a mainstream loan product. Borrowers who were initially turned-off by the perceived risk associated with an "interest-only" loan are now starting to see the benefits: Lower payments, less money tied up in equity, more flexibility, etc. For the savvy borrower, an "interest-only" loan can be an important component to an overall financial plan -- allowing them to divert principal payments to other financial goals. "Interest-only" is typically an option only available on adjustable rate mortgages (although some lenders are now offering this option on 30-Year Fixed Loans). Borrowers who plan on keeping the loan for a long period of time and are uncomfortable with a loan product that has an adjustable rate component, may be interested in the 40-Year Fixed Rate Mortgage.
(Note: Some lenders do offer a 40-Year term on their adjustable rate mortgages)The more flexible underwriting guidelines of a 40-Year mortgage may also attract some borrowers...
40-Year Mortgages: An Alternative to Interest-only Loans?
Mortgages > 40-Year Mortgages: An Alternative to Interest-only Loans?
Florida's Mortgage Resource (FMR) launches new website (www.mortgages-refi.com)
Florida's Mortgage Resource (FMR) website (www.mortgages-refi.com) is dedicated not just to facilitating mortgages for consumers but also educating them in mortgages.Our user friendly site is not only easy to navigate but also contains informative, educational articles on such topics as; An ARM vs. A Fixed rate, Selecting the right loan, understanding your credit, why
http://www.mortgagesrefi.com/wfr_rates_change.html [mortgage rates] change, a http://www.mortgages-refi.com/wfr_document_checklist.html [mortgage document checklist], and many more.
There is also a complete glossary of http://www.mortgages-refi.com/wfr_glossary.html [mortgage terms] commonly...
Mortgages > Florida's Mortgage Resource (FMR) launches new website (www.mortgages-refi.com)
Adjustable Rate Mortgages
If you are shopping around for a mortgage, you may want to take a look at adjustable rate mortgages. Most people believe that fixed-rate mortgages are best because the interest rate never changes for the entire length of the mortgage. With adjustable rate mortgages, the interest rates change from time to time based on different factors.
You may ask yourself why you would choose an adjustable rate mortgage, as opposed to a fixed-rate mortgage, when there is the possibility of your payments lowering and rising. There are several good reasons.
First, mortgage companies typically offer lower initial interest rates when you choose an adjustable rate mortgage. What this means is that the payments will be easier to make because they will be very low ? in the beginning, at least.
Another reason that you might want to choose an adjustable rate mortgage is because many lenders are willing to make larger loans, since the lender will be looking at your income and...
Mortgages > Adjustable Rate Mortgages