When seeking to understand what an equity line of credit is, it is important to first understand what home equity is.
It is basically how much of your home you have actually owned. It is calculated by looking at the current market value of your house minus your outstanding mortgage balance.
If you have a house that has been appraised for $100,000 and you own 50,000 on your mortgage, you have $50,000 in equity. If you no longer owe anything on your mortgage and your mortgage is paid off, then you have 100% equity in your home.
So what is a equity loan?
This is a loan that is borrowed against what you already own in your home. Though just because you own 50% equity, it doesn’t mean that you’ll be given that much. Your debt, income and credit history will also be evaluated. These loans offer tax savings due, because the interest paid on the loan is tax-deductible. They’re often used to consolidate debt, to finance college educations, large vacations, home repairs or even a second home. The most common option is to make regular payments toward both the interest and the principal. Many of us are looking for the best company that offers great deal in terms of mortgage loan.
There are two basic types of equity loans.
Traditional, AKA a second mortgage, gives borrowers a lump sum of money that must be repaid over a designated period of time.
The second type is an equity line of credit. This provides borrowers with a credit card or checkbook to use to borrow funds. With this, if you have $20,000 in equity you can use the credit card or write checks up to that $20,000 amount. It’s kind of like a secured credit card. The benefits of this type of loan are that you don’t begin accruing interest until you make a purchase with your line of credit.
Most home equity lines of credit are only available for a certain time period, 10 years for example. There will also be limitations on how you use your credit. Some plans may require you to borrow a minimum amount each time you borrow and they may require you to keep a minimum amount outstanding. some lenders refer to a second mortgage as a loan used for purposes of adding value to your home.Some plans may also require that you take an initial advance when the line is set up.
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Help answer the question about home repairs
How can you get an idea of a fair price for home repairs and contracting?I get some random estimates for home repairs…how do you know what is fair for a price? I feel like it is easy to get taken in, and I am not super knowledgeable about how much work something actually takes.
There is blue book for cars, anything similar for home repairs? For example, a certain job will take "x" number of man hours and "y" number of supplies?????
The minimum equity needed for a HELOC is 10% but it may be difficult to qualify for that and there will be fees on top of that. A typical HELOC requires you to have 25% equity/down-payment and ok credit (Your credit doesn't have to be perfect… If you applied for a credit card today, would you be approved? If yes, then your credit is good enough to qualify).
5% will only get you a typical mortgage.
Ask Citi why they declined it…. and then work on the areas you need to improve to qualify for this type of loan.
Be careful not to run from one bank to another… everytime they check your credit… your score drops even further.
If Citi, who holds your mortgage, does not approve you… then chances are no other bank will do it either.
Ask yourself: Do you have enough equity built up in your house?
What is your house worth right now. Compare listing prices of similar homes in your area. How much of the mortgage is paid off already?
If you bought within the last 5 years… chances are you still owe too much to qualify for a home equity line of credit.
Cut up the credit cards and start paying them down… the times when you got a HELOC to pay off the cards are over.
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Bankruptcy will not eliminate a 2nd mortgage or Heloc unless they fail to challenge the bankruptcy. It's a 50-50 gamble. If it were me I would do the bankruptcy and set aside the 1st mortgage payments (savings).
Send a certified letter to the Heloc people and 1ST mortgage people that your filing, they should contact each other and write you a 1ST that is favorable to the 1ST, The Heloc 2ND, and you.
The Heloc people won't buy out the 1ST..so they need a deal!
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Home Equity loan, you are basically putting your home up as collateral. A personal Loan is given to you on you good name and credit rating, there is no collateral. Banks are more willing to give you a home equity loan because if you fail to pay the bill, they take your home.
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A home equity loan you get all the money up front. A home equity line of credit you have the money available and can use it as needed. With a loan you pay interest on the whole amount. With a line of credit you pay interest only on the amount that you have used.
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Hi, i have an older frigidaire stove & it seems like the temperature’s not staying high & the top element seems like it works, but the bottom element just gets warm instead of getting really hot the way it suppose to. Can it be a sensor inside?, i have no clue what it can be.
I guess you did not like my first answer, so I'll answer again in a different way. I am assuming from your prior posts that this was taken out at the time you bought the property as a combo loan.
Purchase money loans are non-recourse in California.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default. In deeds of trust or mortgages where a power of sale exists, as in California, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. This is uncommon in most other states where there is no "third party" that can execute the sale upon default by the borrower.
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out by specific rules. Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale and the borrower has no rights of redemption.
On the other hand, the judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. This is uncommon with most commercially available real estate loans (i.e. Citi Mortgage) in CA and most likely would be found when there is a private party lending the money to purchase or finance the real property. Generally, once the court declares a foreclosure, the property will be auctioned off to the highest bidder. Using this type of foreclosure process, lenders may seek a deficiency judgement in an attempt to recoup some of their losses. Under certain circumstances, the borrower may have up to one (1) year to redeem the property.
As a rule, borrowers facing foreclosure and/or a short sale should consult their attorney and tax professional for expert advice.
Edit:
If as stated below, it was done subsequent to the purchase, your liability here is more complex, and depends in part on which lien forecloses first.
If the senior LH (Lien Holder) forecloses first, it will wipe out any junior LH. Should the proceeds on the senior lien's FC fail to cover the amount due on the HELOC, the lender can come after you for the difference, up until the statute of limitations on the debt has run.
The issue is whether the lender actually will do so. If you lack assets, it is unlikely they'll be interested in spending money to get a judgment.
The other important point here is to remember the "one action" rule. If the junior LH is the one who forecloses first, then you will not have personal liability on the junior lien (even on a HELOC) –
the junior LH will have taken its single bite of the apple by foreclosing, and takes only what its "bite" ends up producing. The senior LH, however, is still intact.
Some people, if they simply cannot pay both mortgages anymore, refi or a sale won't work, then they do what they can to keep the 1st TD current. Letting the HELOC go into arrears may force the HELOC lender to make a choice. This may force the HELOC lender to foreclose – and thereby eliminate your largest potential source of liability.
What happens after that is the concern of the junior LH, who has to then monitor the 1st TD to protect its interest in the property. You will, of course, then be evicted by the new record owner – the junior LH – who then gets to decide how to handle the senior LH (pay them off, bid at the senior's FC sale, etc.).
This is not advice, seek the advice of an attorney.
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