Home Equity

125% Home Equity Loans - 3 Things to Know

Lenders that offer 125% home equity loans allow you to borrow the full amount of the equity you have in your home, plus an additional 25%. For example, if you have $10,000 of equity in your home, and you take out a 125% home equity mortgage, you would be able to borrow $12,500 on your home. This is beneficial for home owners who do not have a lot of equity in their home but want to borrow money to make home improvements. If you are considering taking out a 125% home equity loan, there are some things you need to know.

You Will Need Great Credit

Because the additional 25% of your loan is unsecured, lenders will generally only offer 125% home equity loans to borrowers with good credit histories.

Selling Your Home May Not Be an Option

If you were to try to sell your home, you would have to pay off both your original mortgage and your home equity loan. Because you have borrowed more than your home is worth, you may not be able to sell your home until you've repaid at least the additional 25% that you originally borrowed.

Unsecured Loans Carry Higher Interest Rates

Because the extra 25% is not secured by any collateral, the lender will consider the loan to be higher risk than a normal home equity loan. This means that you will most likely be charged a higher interest rate than you would if you took out a traditional home equity mortgage.

Borrowers should be certain that they can afford the monthly payments of their home equity loan. Keep in mind that the monthly payments for this loan are in addition to your current mortgage payment.

Go to http://www.homeequitywise.com to obtain more Home Equity Loan Information.

Home Equity News:

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Home equity loans drying up for some - Personal finance- msnbc.com
Some homeowners are finding that even with great credit and 20 percent or more home equity, getting a line of credit on that equity can be difficult or impossible.
Equity in Americans? homes falls to historic low - Mortgage Mess ...
The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II.
Use of home equity hits a four-year low - Real estate- msnbc.com
The amount of money Americans pulled out of their homes is at a four-year low as homeowners battle falling home values and stricter standards among lenders, Freddie Mac said ...
Morgan Stanley to freeze home-equity lines - Mortgage Mess- msnbc.com
Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, according to a news report.
Late payments for home equity loans rise - Real estate- msnbc.com
Late payments on home equity loans climbed to a 1˝-year high in the opening quarter of this year, while delinquencies on credit card bills fell, painting a mixed picture of how ...
Late payments rise on home-equity loans - Stocks & economy- msnbc.com
Late payments on certain auto and home equity loans climbed in the final quarter of last year, while delinquencies on credit card bills largely held steady, suggesting some U.S ...
BofA tackling debt worries by cutting home-equity lines - Top Stories ...
Bank of America Corp. is tightening up its home-equity lending business, turning down applications and turning off credit lines in struggling housing markets.
Should I get a home equity credit line? - Answer desk- msnbc.com
Free money In this week's video Answer Desk, msnbc.com's John W. Schoen has some advice on how to avoid giving the government more of your money than you need to.
Morgan Stanley to freeze home-equity lines - Today Technology & Money ...
Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, according to a news report. ... Morgan Stanley ...
The New Yorker: When owning isn?t better - The New Yorker- msnbc.com
The housing boom undoubtedly makes lots of first-time home buyers happy. Unfortunately, it may end up prolonging the current downturn. By  The New Yorker's James Surowiecki.

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