Mortgages > HELOCs and Second Mortgages: Which One Should I Choose?

HELOCs and Second Mortgages: Which One Should I Choose?

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..

Mark Lambie is the founder of http://www.the-loan-house.com a website that allows consumers to quickly and easily get mortgage information.

Adverse Mortgages May not Benefit the Consumer Warns Mias

(ContentDesk) March 22, 2006 -- MIAS (the Mortgage and Insurance Advisory Service) is concerned that the boom in the sub-prime or adverse credit mortgage market will not necessarily translate into a better deal for consumers.In the past, the worst excesses of the sub-prime market could be summed up as, the miss-selling of the most expensive and complex mortgages to some of the least affluent and financially-astute people.With so many high street lenders moving into this sector, including Alliance & Leicester and new arrivals such as DB Lending funded by Deutsche Bank, MIAS would hope that this would change. However, the old adage that increased competition is always a good thing for customers, because it brings down prices, may not apply in the adverse credit market. Commenting, Alistair Good, Managing Director of MIAS (http://www.mias-ltd.co.uk ) said: The increased profit margins of the adverse credit sector must be hugely...

Adverse Mortgages May not Benefit the Consumer Warns Mias

Mortgages > Adverse Mortgages May not Benefit the Consumer Warns Mias

Dallas Interest-Only Mortgages

You are buying the home of your dreams with an "interest-only mortgage!" You'll get a low mortgage payment, and you'll maximize your tax deduction, all on your current income! Everything seems to be going good. But have you actually understood the notion of interest-only mortgage and how it functions?

Well it may break your bubble but there is no such thing as an interest-only mortgage -
because eventually you'll have to pay the loan principal as well. In other words, with an interest-only mortgage loan, you pay only the interest on the mortgage in monthly payments for a fixed term. After the end of that term, typically five to seven years, you pay the balance in a lump sum, or start paying off the principal. Net net! What you're really getting is an interest-only payment method which can be combined with any type of conventional mortgage.

An Interest only mortgage can be an excellent option for some borrowers, who have a valid use for a lower...

Dallas Interest-Only Mortgages

Mortgages > Dallas Interest-Only Mortgages

FED Raises Interest Rates, Except On Existing Mortgages

The Federal Reserve took the unusually considerate step of raising the interest rate again while providing that banks could not raise the mortgage rates on people who already have mortgages with them.

While the banks called foul, the new head of the Fed commented, "I think it's time to be forthright about how the Fed manages the economy and the consequences of it. As you know, when the economy slows down, we lower the rate to stimulate it, which inevitably results in people going out and buying homes for the simple reason that they can now afford them. Then when the economy picks up, we raise the rates, which has always meant the mortgage rates go right up with it. So a lot of these people can no longer afford their homes. Well, it's time to end the carnage and come to the rescue of these poor suckers.

Banks can raise the rates accordingly but only on new mortgages."

"Ruined, ruined ? we'll be ruined!" a spokesman for Citibank wailed, as it declared...

FED Raises Interest Rates, Except On Existing Mortgages

Mortgages > FED Raises Interest Rates, Except On Existing Mortgages

Types of Mortgages

Here is a useful guide to the different types of mortgages that are available. A mortgage is a loan you take out to buy property. You can get a mortgage direct from the lender such as banks, building societies and specialist mortgage lenders. Your mortgage is probably the biggest loan you will ever take out, so it is important to get a mortgage that suits you. This will depend on your personal circumstances and your plans for the future.

Many mortgages have hidden drawbacks. Get independent advice before you choose a mortgage. There are two basic types of mortgage, interest-only and repayment. The option you choose is determined by the way you want to repay your loan. There is no hard and fast rule about which is better.

It is a matter of individual preference. Interest only An interest-only mortgage allows you to repay just the interest on your loan, but you have to take out an investment that will mature to pay off the outstanding amount. If your investment performs well...