If you need to borrow a lot of money in order to pay off
debt, help your child through university, start a business or do anything that
requires a large sum of money, turning to home loans may offer the ideal
solution.
Can You Borrow A Lot Of Money Against Your House?
In the old days, many lenders would offer to refinance
houses for over 100 percent of their market
value. The bursting of the real
estate bubble put an end to this practice. Today, lenders will only lend from
80 to 85 percent of a home's equity in most cases. That means if you have £100,000
worth of equity in your house, you might be able to borrow up to £85,000.
Of course, having equity in a home provides some financial
security. You know that you won't have to write a check to sell your house for
its market value, for one thing. Also, securing a loan with a property can be
risky. If you default, the bank or mortgage company could take your house in
extreme cases. These days, lenders are more likely to work with borrowers who
got themselves in financial trouble.
What Are Good Reasons To Borrow Against A Home?
One of the biggest reasons that people decide to take out
home loans is to take advantage of lower interest rates. They can use the cash
to pay off high-interest loans like credit card debt. This should improve
credit scores for two reasons:
- Creditors tend to regard secured debt more favourable.
- Paying off high-interest rate debt should free up more cash to improve finances.
Of course, some homeowners have other reasons to borrow
against their houses. In some cases, they
may want to help a child finance their
education. Some homeowners may even want to further their own education. In
other cases, a homeowner could have plans to start a business. He or she might
choose to use equity funding in order to finance this new venture.
Does Credit Have To Be Good To Take Advantage Of Homeowner Loans?
In order to qualify for a refinance mortgage or home equity
loan, credit scores have to be fairly decent. In any case, the better the
scores, the cheaper the loan is likely to be.
Organising Your Finances
If you feel as though you have to turn to this option
because of your financial situation, getting your finances in order may open up
other doors in the future.
The following video offers some great tips on budgeting to
help bring finances under control -
- For more information regarding interest rates and how they are calculated, please take a moment to read the following article - http://en.wikipedia.org/wiki/Annual_percentage_rate
- If you believe that your credit rating is limiting your borrowing options, the following Nasdaq article offers a number of alternatives - http://www.nasdaq.com/article/5-best-loans-for-people-with-poor-credit-cm462112
Please return to my home page for more information relating
to home owner
loans.
No comments:
Post a Comment