Answers
Just bought a house for $214k 30yr 6.125%, it was appraised at $244k. I'd like to make several home improvments and consolidate some debt. How soon can I get a Equity Loan or Line of Credit , seeing how i just bought the home I wasn't sure if theres a waiting period i.e 6mo-1yr . Also which might be better for my situation the Loan or LOC?
There is no waiting period-- however its typically advised that you maintain 10-20% equity. Using up every dollar of equity is not a smart move-- selling a house costs up to 10%! So if you owe exactly what your house is worth, there's no way for you to sell and walk away from it.
Also a loan up to the last dollar is higher risk and will carry higher interest rates.
Talk to some lenders and see what their policies are-- some of the basic banks still expect you to maintain a certain percentage AFTER the HELOC.
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Here's the story in a nutshell. I purchased a condo in 2005 on an ARM. Just out of a divorce, I decided to consolidate some debt with a home equity line of credit called a 125% loan. Bad move, since I didn't first refi the ARM. Now, the housing market has slumped, my property value is down, I have negative equity, and I can't refi. The ARM has gone up and is due to go up again in a couple months. My payment has doubled and I can't afford it. What will happen if I default on the 1st mortgae but remain current on the second? In other words, what happens to the second mortgage, and how might I be liable even if the payments are current on that loan?
Simple. The first morgage will foreclose. It will pay itself off from whatever the foreclosure sale brings in, including paying off its costs in having to foreclose in the first place. If there is any money left over, it will go to pay off the second mortgage. If the money from the sale isn't sufficient to pay off both, you will wind up owing the rest and getting a really bad credit report. And you condo association might also get involved in foreclosure if you dont pay the assessments. Sorry>
Credit crunch: Home equity lending evaporates
The sharp pullback is dragging on the U.S. economy, household budgets and banks' books. And it's another sign that the consumer spending binge that powered the economy through most of the decade is unlikely to return anytime soon.
At the peak of the housing boom in 2006, banks made $430 billion in home equity loans and lines of credit, according to the trade publication Inside Mortgage Finance. From 2002 to 2006, such lending was equal to 2.8 percent of the nation's economic activity, according to a study by finance professors Atif Mian and Amir Sufi of the University of Chicago.
For the first nine months of 2009, only $40 billion in new home equity loans were made. The impact
The General Standards for Low Home Equity Loans - Financial Web
There are some things you should know to get as low a home equity loan as possible. A home equity loan allows you to obtain a loan by using the equity in your home as collateral. Equity is defined as whatever funds you invested in you home to own or improve it. Thus, it is a secured loan. The property can be foreclosed if you do not pay it back. Home equity loans are variable loans, which means that the payments you make will shift over time, unless you are explicitly getting a fixed loan. If you loan is not fixed, then your payment can vary widely based on predetermined intervals according to market rates. You will want to get a loan with as low an interest rate as possible. This is true even if the interest is tax-deductible, as it often is.
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Home Mortgage Refinance When You're Underwater on Your Mortgage LoanThe City Wire - Dec 29, 2009
Home Mortgage Refinance When You're Underwater on Your Mortgage LoanThe federal government's Home Affordable Refinance plan now makes it possible for troubled homeowners to refinance their existing mortgage up to 125 percent and more »Minyanville.com - Dec 29, 2009
Because of this, most lenders are no longer offering home equity lines of credit and are reducing current lines with credit-worthy homeowners. and more »Maryville Daily Times - Dec 26, 2009
He planned to pay for the project with his $200000 home equity line of credit, which he took out in January 2007 when his house was valued at $750000. and more »Wall Street Journal - Dec 23, 2009
"It was a difficult situation, because the market is saying the company is worth 70 pence, but someone is offering you cash for 125 pence," Terrington said,Examiner.com - Dec 13, 2009
So homeowners with loans of more than conforming limits of $417000 were also blocked from this program, regardless of credit scores, equity, and more »Sun-Sentinel.com - Dec 04, 2009
Q: I can pay my primary mortgage, but my two home equity lines (different lenders) are killing me. Since the house is under water, what happens if I don't and more »Irish Independent - Dec 20, 2009
That means that a fairly average person in a fairly average house could be in negative equity to the tune of €200000. The bottom line is that a fairly