Buying a home is a huge accomplishment for most and a rather large investment. Your home purchase will probably be one of, if not, the largest investment you will make in your lifetime. And it should feel good. If you did/do it right, then you will be able to adjust into your home comfortably without stressing over your mortgage payments. Plus, being a homeowner has its advantages.
You bought your home, remodeled, upgraded the interior to suit your style and needs and have made necessary repairs. If you were wise with the upgrades and the market is where it should be, chances are you have built up equity in your cozy home. Your home investment could be double what it was originally worth when you purchased it. However, there are many factors involved when considering your home equity amount.
A home equity loan is a loan for a locked amount of money secured by your home. Your payments work similar to your mortgage payments with locked-in monthly payments over a set term. If you neglect to repay then your Investor will be able to foreclose on your home. So you never want to borrow more than you can comfortably afford. Usually, there is a percentage you are able to borrow (limit 85% of equity available in your home) and other factors are taken into consideration such as income, credit history and current market value of your home.
When you are ready, you want to shop around for Investors. Compare and ask questions so that you fully understand the terms, interest rate, annual percentage rate, financing charges, and any other hidden fees associated with the terms of your equity loan. Some fees you may encounter are loan processing fees, origination or underwriting fees, Investor or financial fee, appraisal fees and document preparation and recording fees. Be certain you clearly understand all of the possible associated fees. If your Investor adds points or fees to your total loan amount, then you will end up paying more for financing them but you do still have negotiating power. Verbalize that you are indeed shopping around so they know you are looking for the best possible offer. Request they lower fees, points, or interest rates because the worst that could come from your request is a no. If you find a particular Investor that you like but found better terms from another, bring those terms and ask the Investor of preference if they will match.
A home equity loan doesn’t have to be difficult to attain. Shop, compare, and ask the right questions and you will be well on your way to acquiring the loan you need. Give us a call today and allow us to help you find a home equity loan that fits your needs!