|
HELOCs and Second Mortgages: Which One Should I Choose?
By Mark Lambie
Whether you need some extra cash to pay off some credit card
debts, or to make some home improvements, home equity lines of
credit or second mortgages can be great ways to get started.
Many people looking to borrow money often opt for home equity
line of credit, or HELOCs, for short. They are a tempting first
choice, because they can often give you the much needed cash at
a low interest rate. Another advantage to taking out an HELOC,
or a home equity line of credit, is that they may provide the
borrower with a certain tax break, but you would need to verify
this with your lender or accountant.
One drawback to HELOCs, however, is the fact that borrowers
are expected to put their homes up as collateral. So, it is
important that you think this decision through, before finalizing the
loan, because you may be at risk of losing your home- and its
equity- if you are late or cannot make your monthly payments.
Finally, if you decide to sell your home, must HELOCs will
require that you pay off the balance, before completing the sale.
You can also take out a second mortgage, if you need some cash.
Like the HELOC, second mortgages usually pay out the loan in
one sum, which makes it a convenient option. Second mortgages
also have the added advantage of having set payments, at a fixed
interest rate. Many companies will charge a lending fee, which
will vary from company to company. These fees are usually
based upon a percentage of the loan and are frequently referred
to as 'points.' If one fee seems too high, don't be afraid to shop
around to find one which is better suited to your budget.
Remember, however, that adding a second mortgage to your
home carries with it certain risks. Like with home equity lines of
credit, you could lose your home, if you fall behind in the
payments.
About the Author Mark Lambie is the founder of The Loan House a website that allows consumers to quickly and easily get online mortgage quotes and mortgage information.
Article Source: http://www.simplysearch4it.com/article/8726.html
If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/8726.html" as shown above and make it hyperlinked. |
Some other articles by Mark Lambie | Rhode Island Mortgage Loans Whether you live in the Blackstone Valley, Block Island, East Bay, South
County, Warwick, Providence, or Newport you know that Rhode Island
offers so much to you. "Little Rhodey" is rich in history and her ...
Getting a Nashville Mortgage Quote Purchasing a new home requires much research on your part.
Working with a realtor and finding a real estate closing attorney is
vital in your quest to ...
Nashville Mortgage Companies You've entered into a contract to purchase your new home. The sellers
are anxious to see if you can come up with a loan and you are pressed
for time. What ...
Finding a Mortgage in Louisville Louisville, Kentucky is a charming city located in the heart
of the Bluegrass State. The University of Louisville is
noted for its academic prowess as well as for fielding
several top ...
Searching for a Mortgage in Lexington ? Lexington, Kentucky is where you want to live, right? It is a
lovely city! Getting a Mortgage Lexington is your first step
toward purchasing ...
Miami Online Home Loans Living in Miami, Florida has so much to offer. Tropical weather,
mild winters, lovely beaches, a thriving night life, a diverse
community, and great food are some of what you can ...
|
|
| |
|