Hybrid Home Equity Loans Changing the Face of Second Mortgages

Tip! When you apply for a home equity loan, it is wise to know how a home equity loan works in order for you not to put your home at risk. The difference will now be the amount of equity you have in your home, or the home equity.

Applications for home equity loans and second mortgages recently hit a 15 year high. According to Freddie Mac, "88% of homeowners who refinance their homes in the 1st quarter got a mortgage at least 5% larger than their first loan." Since this was the largest increase since 1990, and the Fed continues to increase key interest rates, it is my contention that the demand for cash and the ability to finance quickly is the greatest it has been since World War II.

"The reality is that some people still believe the interest rate are under 6%,"said John Allen from Laguna Beach, California. John continued, "If I need cash for home improvements..Why wouldn't I just take out home equity loan since my first mortgage rate is under 5%." John's mentality mirrors many of my borrowers' frames of mind of late. Consumers are much more educated than they used to be about financing and taking out second mortgages. First time homebuyers don't hesitate to get subordinate financing to help them accomplish their goals. Some people like John just want to finance the construction for pool and spa, but most of my borrowers are focused on consolidating credit card debt so they can cut their expenses and have access to more money at the end of the month.

Some interesting home equity products have rolled out recently. Companies like BD Nationwide Mortgage and Ditech are offering larger 125% loans, and convertible equity credit lines. They are called convertible, because they start out as variable rate credit lines, but at any point you can convert portions of the line to a fixed rate loan, and still keep the unused portions of the line of credit open for revolving credit. These hybrid home equity loans are changing the face of second mortgage products and they offer powerful features that meet the needs of a typical family as well as the savvy real estate investor.

Lynda Nelms continues to write her popular column, called "Ask Lynda" where she offers helpful home financing tips to consumers from an experienced loan officer's perspective. She inpires a growing number of loan officers across the country with her fresh approach to home equity lending.

Tip! If you are considering getting a home equity loan, you can either get a fixed rate loan or a home equity line of credit. Lenders usually base the rates on their home equity loans on their Prime Interest Rate, the interest rate they charge their most qualified clients or borrowers.

Currently, Lynda originates loans for BD Nationwide Mortgage, who is headquarted in beautiful San Diego, California. You can read more of her "Ask Lynda?" articles online at BD Nationwide Mortgage & Equity Loans where you will also find more information about refinancing, debt consolidation and how to finance the purchase of a second home.

For a complete look at 2nd mortgage and refinance loan options, please visit Fixed Rate Debt Consolidation Loans or go to 125 second mortgage loans to learn how to consolidate your debt without having any equity.

Home Equity News:

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Home equity loans drying up for some - Business - Personal finance ...
Like many homeowners during the housing boom, Lynnette Madden and her husband decided to open a home equity line of credit about a year and a half ago as ...
Americans' home equity near a record low - Business - Real estate ...
WASHINGTON ? Falling U.S. home prices have shrunk equity so much that the proportion of their homes that Americans actually own is near its lowest point ...
Home equity lines have dried up across U.S. - Business - Personal ...
Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy Below:
Late payments for home equity loans rise - Business - Real estate ...
WASHINGTON ? Late payments on home equity loans climbed to a 1½-year high in the opening quarter of this year, while delinquencies on credit card bills ...
Retirees no longer count on home equity - Business - Personal ...
Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the ...
Equity in Americans? homes falls to historic low - Business ...
NEW YORK ? The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II ...
Students get creative to pay off loans - Business - Personal ...
Lines of credit typically work like a credit card, with a limit and a revolving balance: the average home-equity line of credit currently has an interest rate ...
Use of home equity hits a four-year low - Business - Real estate ...
Use of home equity hits a four-year low Freddie Mac report cites falling residence values, stricter lending standards Below:
Ford, Toyota are pinning their hopes on China - Business - Autos ...
NEW YORK ? Ford Motor Co. plans to build a new assembly plant in China ... $30K home equity loan FICO: 5.75%
Cities sue, invest to stop foreclosures - Business - Real estate ...
These stem from lost tax revenue and jobs as well as slower consumer spending that come with home equity declines, and don?t even include the financial toll ...

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