Home Equity Loans – second mortgage

beach_babe972 asked:


does this sound good?

you can buy a house now, and have it payed in 5-6 years. you can buy your vacation house now, or retirement house, and rent it, and the rent will pay the mortgage. and it will apprechiate by the time you retire.

you can reverse the compounding interest on a 30 year loan. (average daily balance). just like banks will take your payments and pay the lower interest loans first. when you do a 30 year mortgage, the lender takes monthly payments after the interest coumpounds the most. so instead you can take out a HELOC (home equity line of credit) as a second mortgage, a credit line of 30,000 for example, and use it to pay $15,000 towards the principle. now you lowered the principle amount by 15,000. so the interest is less. then use your monthly income to pay down the HELOC. when the HELOC is back to 0, pay another 15,000 to the principle with the credit. and your paying down the principle a lot faster than if you just made monthly payments to the loan. and the first month on the HELOC after paying it back down to 0, is 0%. the balance has to go past 30 days to have finance charges. since your always paying it down every few months, you’ll always have 1 month with no interest.

if you only paid monthly payments, after the first 10-15 years on a 30 year loan, you barely paid anything to the principle becuase most of your monthly payments go to interest.
if you have a 500,000 loan for 30 years, your actually paying $1,000,000 after 30 years because of the interest on the average daily balance of the loan.

so with the HELOC, you lowering the principle amount way faster then you could just making monthly payments.

and since your renting your retirement house, theres still monthly payments to the loan from the renters.

then in 5-6 years you will have some apprechation, and most of the loan will be paid, and you can live in it almost free, or sell it and have $200,000-$300,000 tax free.

CHUCK

Derrick Adolfo asked:


Equity release allows you to release the tied-up equity in your house, that is, the balance on your property, that is the actual monetary worth of your assets minus liabilities. Apart from the requirement that you need to be a legal homeowner in the UK, age is the primary eligibility criterion for equity release mortgage scheme.

You can avail to this mortgage to supplement a part of your retirement income.

Research shows that more people intend to avail to this scheme as much as to unlock the potential of their homes. In all instances, age is the primary factor in determining the percentage of the equity value of your home that can be released. A senior houseowner can release equity of higher percentage since they are likely to predecease those younger to them, which means lesser period for the provider in which to pay the equity release mortgage. Also as of now, applications are not usually granted to anyone under the age of sixty.

Availing to equity release involves complex calculations, where you have to balance your monthly mortgage payments with the net equity worth of what your heirs would inherit. In this light, it is important for you to consult financial experts who can advise you on the same. This service is available with the special equity release firms whom you can conveniently contact by visiting their websites on the Internet.

Another important thing to consider is negative equity guarantee which ensures that your debts should also decrease in the event of decrease of your property value. Secondly, it ensures that any outstanding debt, after the sale of your property, is not passed on to your nominated successor/s. equity release mortgage thus eases your life after retirement since you pay in the form of property and do not have to worry about repayment in the remainder of your lifetime.



JOEL