Get Cash From Your Home
Use your home equity to your advantage. You have been waiting to update your kitchen and now is the right time for you to do it. Take out a home equity loan and get your dream room in the house of your dreams.
Here are some of the benefits when you choose a cash-out Home Equity Loan.
- Pay off high-interest credit card debt
- Buy a vacation home
- Pay off college tuition
- Make repairs or home improvements and increase the value of your home
Get Cash From Your Investment Property
You can refinance your investment property to lower your monthly mortgage payment. Plus, increase your rental income. Use the equity in your rental property to buy an additional property and expand your investment portfolio.
You could also use the extra money to fund additional investment opportunities, such as starting up a new company or buying high-return stocks or bonds.
When you increase your cash flow, you’ll have money to make repairs or home improvements and increase the value of your investment property.
Mortgage Fast allows you to refinance your mortgage at any time with absolutely no pre-payment penalties.
Home Equity Loan vs. Home Equity Line Of Credit
If you’re a homeowner, you can borrow against the value of your house through either a home equity line of credit (often called a HELOC or a line) or a home equity loan (often called a HEL or loan). Both are essentially a second mortgage.
What’s the difference?
A HELOC allows you to draw funds, up to a predetermined limit, whenever you need money. There is generally a minimum payment due each month, with the option to pay off as much of the line as you want. The way that you draw and repay funds for a HELOC is similar to the way you draw and repay funds for other revolving lines of credit, such as a credit card. With a HEL, you receive a lump sum of money and have a fixed monthly payment that you pay off over a predetermined time period. In each case, the amount you can borrow is based on factors such as your income, debts, the value of your home, how much you still owe on your mortgage and your credit history.
Benefits
The appeal of both of these types of loans is their interest rates, which are almost always lower than those of credit cards or conventional bank loans because they are secured against your home. In addition, the interest you pay on a home equity line or loan is often tax deductible (consult a tax advisor about your particular situation).
Which is best for you?
Generally, a HELOC is a good choice to meet ongoing cash needs, such as college tuition payments or medical bills. A HEL is more suitable when you need money for a specific, one-time purpose, such as buying a car or a major renovation.
Comparing the costs
Both HELOCs and HELs usually carry a higher interest rate than that of a first mortgage. With a HEL, you may choose either an adjustable rate that fluctuates according to variations in the prime rate, or you may opt for a fixed rate. A fixed rate enables you to budget a set payment monthly without worrying about increasing costs should interest rates rise. With a HEL, there are also closing costs that you should consider. A HELOC usually carries a lower initial interest rate than a HEL, but its rate fluctuates according to the prime rate, so there is more interest rate risk. Unlike a HEL, where your monthly payments are a set amount, a HELOC enables you to borrow funds as needed and repay as little as interest only each month. In addition, there are generally no closing costs when you open a HELOC.
