Bridge Loan or a Home Equity Loan may be the right tool to help you

Information about Bridge Loan or a Home Equity Loan may be the right tool to help you

Published on July 28, 2014

Author: myhardmoney

Source: authorstream.com

Content

PowerPoint Presentation: B r i d ge Loan or a Ho m e E qu ity Lo a n m ay b e t h e r ig h t t ool to h e lp you T y pi c a l l y jun i or H o m e e qui t y loans should not be c onfus e d with a b a sic r e fin a n ce , wh i c h me a ns a nd r e pl a c ing m o rtg a g e with anoth e r lo a n. 30 d a y s for R e fin a n c e s c a n be t a k e n or mo r e to pro c e ss. Home e qui t y lo a ns fund is f a ir a nd quick a nd a re sub o rdin a te to a n e x is t ing fi r st mort g a g e . I n other wo r d s , a n e qui t y l o a n f a l l s in t o s ec ond posit i on. Your home is the s ec u rity f o r the h a rd mo n e y le n d e rs loan, m ea ni n g g o in t o d e f a ult mor t g a g e p a y m e nts or othe r wise t h e lend e r h a s the r i g ht t o f or e c lose. I n m a n y stat e s , if a homeo w n e r stops p a y i n g the fi r st l e nd e r, t h e s ec on d - posit i on lend e r ca n st e p in, make up the p a y m e nts t o the f irst lend e r a nd b e g in i ts own fo rec losu r e proc ee di n g s. Your h ome is a t risk wh e n y ou ta k e out a home e qui t y loan. B r i d ge Loa n s B ri d g e loans a re u s e d b y s e l l e rs b e fo r e s e l l i n g a n e x i s t i ng home who wa nt t o b u y a n e w home but ne e d the c a sh f r om t h e e x is t ing home. B ri d g e l o a ns used mo r e of t e n in s e l l e r ' s ma r k e ts t h a n in b u y e r ' s m a rk e ts. C o m mon t e rms f or a bri d g e l o a n a r e : L o a n a moun t s will be up to 80% of ma r k e t valu e . H i g h e r lo a n c osts will be s u c h a s p o in t s or a dm i n f e e s. F o r 3 to 4 mon t hs, th e re will be no p a y m e nts .Mon e y l e nd e r h a s r i g ht t o ren e g ot i a t e loan t e rms if h o me do e s not s e ll with i n loan t e rm . S ome l e nd e rs d e m a nd the bo r r o w e r obt a in t he fi n a n c i n g for their n e w home f r om t he lend e r m a k i ng t he bridge loan. Ho m e E qu ity Loa n s Equi t y loans c a n be us e d tow a rd the pu r c h a se p ri c e of a n e w home but B o r r ow e rs c a nnot ob t a in e qui t y loans in a ll 50 st a t e s. The h a rd mo n e y len d e r w i l l not make the lo a n if y our h o m e is on the m a rk e t. Th a t’s w h y ma n y s e l le rs obt a in bri d ge loans ins t ea d of this. S ince h i g h e r c osts with a brid g e l o a n mak e s mo r e s e nse to get a n e qui t y lo a n if y ou h a ve to p l a n for e nou g h in a dv a n c e . Home e qui t y l o a ns ca n b e a lso obtain e d to p a y f o r home improv e ments / remodelin g , c ol le ge e du ca t i on or medi c a l e x p e ns e s. The r ea son f o r this, i nte re st is t a x d e du c t i b l e on a home e qui t y loan; so ma n y homeo w n e rs c hoose to bo r row a g a inst a r e siden c e to b u y c o nsum e r g oods. Re a son that if th e y fin a n c e c ons u mer g oods b y ob t a in i ng a n uns ec ur e d l o a n, th e y ca nnot dedu c t t he in t e r e s t . I t i s not a g ood i d e a to bor r ow a g a inst y o ur h o me to pu rc h a s e lu x u ri e s such a s mo t or homes, ski boats or v aca t ions, but people do i t .

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