Home Equity Loans – second mortgage

Blake Fisher asked:




If you have bad credit or even just below-average credit then you probably have realized first-hand just how difficult it is to get pretty much any kind of loan. Lenders simply view people with bad credit scores as high-risk individuals, and there isn’t much you can do to change this perception. If you own a mobile home and you have built up some considerable equity in your property then you may be interested in a mobile home equity loan. A mobile home equity loan can give you a loan that can be secured by the equity you have built up in your mobile residence, and like other loans, whether you get approved or not will depend heavily on your credit.

The good news is that there are lenders that supply all kinds of loans for people with bad credit histories, and some of these lenders even specialize in providing niche-type loans such as mobile home equity loans. These types of lenders will listen to your explanation as to why your credit is so bad, and they will typically grant you a pass in terms of approval as long as you can meet the remainder of their requirements. When it comes to home equity loans, these types of lenders like to see that you have a good employment history, and this should translate into a demonstrable and consistent income that you can show the lender.

Once these sorts of lenders see that you have enough money leftover each month to make the payment on your mobile loan they will then make exceptions if you don’t have the best credit in the world. Lenders still don’t like to see bankruptcies and other sorts of delinquencies and late-payments on the credit report but if you can show that you can repay the loan each month they may be able to overlook these kinds of things as well. Some of these lenders will not be able to make a mobile loan if your mobile unit isn’t built on a solid foundation, so make sure this is in place before you start to go out and apply to a bunch of lenders. Work on your credit and the remainder of your application and you will eventually get that mobile home equity loan with no problem.

Manuel

Carrie Reeder asked:




When you apply for a home equity loan, lenders consider your creditworthiness when deciding whether or not to extend a loan. Your creditworthiness is assessed based on three things: credit history, income, and loan-to-value ratio.

Credit History

As with any loan, your credit history will have a major effect on home equity loan availability and loan interest rates. Fortunately, qualifying for financing on a home you already own is much easier than qualifying for a new home loan. If you have good credit, you should have no trouble qualifying for a home equity loan. You should also be able to obtain a relatively good rate. If you have bad credit, you should still be able to obtain a home equity loan, but your rate will probably be a bit higher. Before applying for a home equity loan, take time to pull your credit report. If possible, improve your credit rating by removing mistakes and old debt.

Income

Even though the equity that has built up in your home belongs to you, lenders will still want to make sure that you can pay back any amount that you borrow. To determine your ability to repay, lenders will assess your monthly income and your total debt-to-income ratio. (Debt-to-income ratio is a term used to describe how much of your monthly income goes towards paying your mortgage, credit card debt, loan installments, and other financial obligations, including the home equity loan for which you are applying.) Most lenders will want to make sure that your total debt does not exceed 38 percent of your monthly income.

Loan-to-Value

The loan-to-value ratio is the amount you owe on your house versus the amount your house is worth. For example, if your house is worth $100,000 and you still owe $70,000, your loan-to-value ratio is 70 percent. When you get a home equity loan, the value of your home is re-assessed. The lender will add your current mortgage balance to the requested home equity loan amount, and divide the sum by your home’s current value. The final amount is the new loan-to-value ratio. Many lenders want to keep this amount below 80 percent. However, some lenders are willing to loan you 100 percent of your home’s value or more. Here is a list of recommended Home Equity Lenders online. It’s important to use a reputable lender online to make sure your personal information is secure.

Monica

Rebecca Welch asked:


Home improvement loans can provide money for a complete home remodel or specific home improvements. These upgrades can transform your house into a home and increase your property value. Another benefit is that the money is tax deductible. As long as you carefully evaluate your fincancial situation, you may use a home equity loan to make home improvements.

Home improvement loans are not the same as construction loans. Construction loans provide financing for building and completion of a new structure. A home improvement loan is essentially a home equity loan placed on your existing home that you currently occupy. The lender generally pays you in one lump-sum at closing. This is also sometimes called a second mortgage loan.

Home equity loans are great if you only want to borrow small amounts of money for home improvements and pay off the loan in a short amount of time. A home equity line of credit can create flexibility and convenience by giving you the ability to withdraw money in varying amounts as necessary. However, home equity credit lines generally use adjustable interest rates and this carries the potential risk of increasing over the life of the home equity loan.

Lenders rarely place restrictions on home improvement projects as long as they are conform to your local building requirements. Depending on the size of the home improvement project scope of the job, you may do the home improvement work yourself or hire a general contractor. Be certain you read the fine print on your home equity loan for home improvements because some lenders may require you to hire a contractor for the project which can significantly increase the cost of your home improvement project.

Terms for home equity loans can range from 5 to 25 or even 30 years. Some lenders offer fixed rate as well as balloon rate options. The minimum amount you may borrow for a home equity loan is generally about $10,000. You can most often times borrow up to 100% or, in some cases, even as much as 125% of the value of your home. However, most lenders will limit a home equity loan for home improvements to a maximum of $1,000,000.



FRANKLIN