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Home4cash CHL

Home4cash CHL

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Published by spacehopper

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Published by: spacehopper on Oct 26, 2007
Copyright:Attribution Non-commercial


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Second Mortgages:
Utilizing Your Home’s Equity or Cash
tapping the home equity saety net that’s right under your roo —or a line o credit or xed rate mortgage that canequal ast, fexible extracash. Even i you have less-than-perect credit.
I you’ve been making payments on your home loan, or yourhome’s market value (the price you could get or it i you soldit today) has gone up since you bought it, you probably haveequity in your home that you may be able to use or extra cash.
Home equity is simply the dierence between your home’smarket value and what you still owe on your mortgage(today’s balance). For example, i you owe $80,000 on yourhome, but its market value is $100,000, then you may haveas much as $20,000 in equity.
Calculate your equity here: 
Fill in the blanks below to determine how much equityyou may have.Your home’s current market value$____________(Find your home’s estimated value atwww.zillow.comorwww.homevaluecentral.com)* Current mortgage balance– $____________Estimated available equity= $____________ You may be able to access your equity with one o these options: 
- A home equity loan (sometimes called a fxed ratesecond mortgage)- A home equity line o credit (sometimes called aHELOC or short, pronounced “he-lock”)- A home loan refnance (also called cash-out refnance),where you pay o your existing mortgage with a newmortgage and get cash back.
 *Zillow.com and HomeValueCentral.com oer homevalue estimates only and should not be reliedupon or actual loans.
Advantages o using your equity or extra cash:Consolidate debt using home equity
Debt consolidation (paying o your credit cards and otherdebt using the money rom your home equity) is one o themost popular uses o home equity. By using your home’sequity, you can oten get a lower interest rate than creditcards and other types o loans. Another big advantage isthat since you pay o all your other debts, you’ll likely haveewer payments every month.
Other ways to use your home equity
There are no limits on how you can use the extra cash youget rom your home equity. Other than debt consolidation,here are some other popular uses o home equity:
What is home equity? 
Lower interest rates than other forms of 
Flexible way to have cash available quicklyUsually a small amount of paperwork needed
Interest payments are tax deductible in
 most cases*
Can be a smart “emergency” account to help pay
or unexpected expenses
*Consult your tax adviser.
Home improvement or repairsBuying a new or used vehicleSchool tuition and college costsMedical bills• Weddings• VacationsStart a businessOther large purchases such as a boat or RV Investments such as rental property or land
Home equity loans:
also known as second mortgages
I you’ve built equity in your home (meaning your home isnow worth more than you owe on your home loan), then itmay be simple to turn that equity into cash.One option to accessing your equity is through a homeequity loan, also called a second mortgage. Other ways area home equity line o credit and a renance o your existinghome loan.
Why choose an equity home loan?
I you’re interested in using your home’s equity to pay o a large amount o credit card and other debt, or to pay ora large, planned purchase — but you don’t want to worryabout an interest rate or payment that might change — axed rate second home equity loan may be a good optionor you.Unlike home equity lines o credit, which give you a pool o money to draw rom over time as you need it, equity loansgive you the money all at once. That’s why home equityloans can be perect or a one-time debt consolidation(paying o your other debt with the equity cash) orbig purchases like a new or used car or homeimprovement plans.
Why an equity loan can be a good thing:
I you’re trying to decide between an equity home loanor line o credit, a good resource istheFederal Reserve Board Web site.
A 2nd mortgage — using the available equity in your home to put cash inyour pocket — can be a great nancial tool, even i you have less-than-perect credit. But is it right or you? 
Offers an interest rate and a monthly payment
that will not change
You’ll know exactly when you’ll pay off the loan
 ater a certain number o payments
Usually the interest rate for an equity home
 loan is lower than credit cards and other typeso loans
The interest, in most cases, is tax deductible and
that will save you money on your tax return*
* Consult your tax adviser.

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