A person goes for mortgage by borrowing loans from a lender which is preferably a bank or a credit union. They offer loans at low interest over a period of thirty years. Failure to repay the loan with interest leads to the lender taking back the possession of the house. In such a situation people avail additional loans. A second mortgage loan uses the same home as collateral to obtain the loan.
The same house serves as collateral for the first as well as the second mortgage. However, the first mortgage lender has more rights over the house over the second mortgage lender. So the second loan is given at a high rate of interest. The loan is given based on the equity that has built up on the house. The equity is arrived at calculating the difference between the market value of the house and the loan amount due on the first mortgage. The higher the equity value, the brighter the chances of getting the second loan. The second mortgage loan is repaid over 15 to 30 years a fixed rate.
Home Equity Loans and Home Equity Lines of Credit:
The second mortgage loan can be obtained through the Home Equity Loan (HEL) or Home Line of Credit (HELOC) schemes. For both, the built up equity on the house is taken into account. The HELOC is more borrower friendly as it is flexible and a borrower can avail the money as and when needed. In the case of HEL, the borrower has to pay interest on the loan money that he or she gets and not on the actual loan he avails now and then. The interest rate is fixed and the structure is rigid.
The financial stability plan brought out by the Obama administration is to make home loans affordable and to avoid foreclosures.
The same house serves as collateral for the first as well as the second mortgage. However, the first mortgage lender has more rights over the house over the second mortgage lender. So the second loan is given at a high rate of interest. The loan is given based on the equity that has built up on the house. The equity is arrived at calculating the difference between the market value of the house and the loan amount due on the first mortgage. The higher the equity value, the brighter the chances of getting the second loan. The second mortgage loan is repaid over 15 to 30 years a fixed rate.
Home Equity Loans and Home Equity Lines of Credit:
The second mortgage loan can be obtained through the Home Equity Loan (HEL) or Home Line of Credit (HELOC) schemes. For both, the built up equity on the house is taken into account. The HELOC is more borrower friendly as it is flexible and a borrower can avail the money as and when needed. In the case of HEL, the borrower has to pay interest on the loan money that he or she gets and not on the actual loan he avails now and then. The interest rate is fixed and the structure is rigid.
The financial stability plan brought out by the Obama administration is to make home loans affordable and to avoid foreclosures.
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The same house serves as collateral for the first as well as the second mortgage. However, the first mortgage lender has more rights over the house over the second mortgage lender. So the second loan is given at a high rate of interest. pakistani designer suits , pakistani designer lawn , lawn dresses stitching designs , buy lawn suits online , pakistani lawn brands , lawn dress design , suiting brands in pakistan , lawn fabric online The loan is given based on the equity that has built up on the house. The equity is arrived at calculating the difference between the market value of the house and the loan amount due on the first mortgage. The higher the equity value, the brighter the chances of getting the second loan. The second mortgage loan is repaid over 15 to 30 years a fixed rate.
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