If you are looking for cash, you can try to obtain a personal loan. These unsecured loans can be difficult to obtain and can come with relatively high-interest rates. A smarter solution may be to take equity in your home and put it to work with a home equity loan. Using your home is called a secured loan because the loan is secured by the equity in your home. Interest rates are often lower because the loan is secured, and if the equity is from your principal residence the interest can be tax deductible.
If you have owned your home for a period of time you have been accumulating equity and may have paid off your first mortgage. Sometimes people need access to this equity quickly, but this is where conventional equity loans can bog down. Equity loans from conventional lenders can require weeks or months to get approved, and any blips in your credit rating or other factors can squelch your loan application. The AHL Hard Money Network can help because our investors tap directly into the accumulated equity and you can be approved in days versus weeks.
For educational purposes, let’s review the types of home equity loans available in the marketplace:
Home equity loan — This refers to the conventional loan secured by the equity in your home. It may be a second mortgage if your existing mortgage is still being paid, or a new first mortgage if your home has been paid off. You should review what interest rates are being charged and the maximum loan-to-value (LTV) permitted by the lender. Once you pay off a home equity loan you will need to re-apply if you wish to use this type of loan again.
Home equity line of credit — A line of credit is an approval for a specific amount of money, with principal payments not beginning until sometime in the future, perhaps 10 years out. Any money you borrow against the line of credit is secured by your home’s equity. Although interest rates can be lower with this type of loan, the interest rates are often floating against the prime rate.
Reverse Mortgage — Reverse mortgages are only available to older homeowners over the age of 62. The equity is loaned to you as a lump sum or monthly payment. Reverse mortgage fees can be the highest of these types of loans because the lenders often require insurance to make sure property taxes are paid. Reverse mortgages can create issues if the owner passes away and the heirs are forced to repay it, often resulting in the home being sold to repay the reverse mortgage. If you intend to leave your home to your heirs, a reverse mortgage is not recommended.
If you need home improvement, the pay of its liens, debt consolidation, purchase a new home, new pool, kids college tuition, whatever the reason. If you own a free and clear paid off home, condo, secondary home or vacation home. We consider your equity and contact you directly in one day saving and not look at credit. When you are ready to tap into the equity in your home, consider the AHL Hard Money Network. We can help you if your credit is less than perfect, you are a self-employed homeowner, or for any other reason, you have been rejected by conventional lenders. Our pool of private investor network is looking for homeowners like you, so contact us today.