With interest rates still low,
now may be a good time to consider a
renovation, purchasing a new car or
making some investments. The equity
in your home may be able to help you
secure the necessary funds to help
you achieve your goals.
One way to access this
wealth opportunity in
your home is to refinance the
existing
mortgage. This adds
additional funds to the
mortgage but
it may yield a much lower interest
rate and possibly lower
monthly payments than a traditional
loan. One caution, however; adding
to your existing
mortgage means it
will take longer to pay it off. As a
consequence, you will be paying more
interest.
Another way to access the equity
in your home is to open a line of
credit that is secured against your
home. Just as with refinancing, a
line of credit may be available at
an interest rate that is lower than
a regular loan. In some cases, the
interest rate on a line of credit
can be as low as prime.
A line of credit gives you
payment flexibility that is not
available with a conventional
mortgage. Not only do you have
control over the length of the loan
and how you repay it, you also have
the flexibility to pay off the debt
at anytime without penalty and you
can control
The amount of payment you make
each month - the minimum, as little
as interest only, or as much as you
can afford. The larger your monthly
payment, the quicker you will pay
off the line of credit and the lower
your overall interest costs.
If minimizing the amount of
interest you pay over the lifetime
of the debt is important, then a
secured line of credit may work for
you. To qualify, you generally
require 15-25 percent equity built
up in your home. Legal fees or
registry fees may apply.
If you are considering leveraging
your home equity, you should meet
with a qualified lending expert, A
lending expert will explain your
options, offer a variety of
solutions, and help you make the
best decision to suit your needs and
your budget. Uncover this hidden
wealth opportunity in your home.
Mortgage Glossary9
