What is HELOC?
The line of credit for a home equity is popularly known as HELOC; and is a rotating credit line which upholds your home for immense disbursements and/ or to associate debts with maximum interest rate on loans like credit cards, etc. HELOC is one of the few loans out there that has the potential to be a loan with low-interest rates & tax-deducted interest amounts.
HELOC works like a personal credit card. When receiving a Loan, you are getting it on behalf of the present equity of your house as collateral for your personal credit line. When you begin to pay off your previous retained balance, the amount of availed equity is replenished similar to that when dealing with a credit card. The bottom line is that you can easily acquire another loan amount if need be throughout your sustained period of withdrawals (normally around 10 years). After that, your repaying period initiates and you start paying off the amounts you’ve loaned (normally around 20 years).
HELOC can be the perfect option for the lot, as it is conducive when one needs a large sum of money for home improvements or amalgamate debts. HELOC’s low interest rates than other unbolted debts like credit cards, or personal loans, make it the most affordable option possible. Without even tapping into your home equity.Additionally, provide you with the freedom from tax payments and tax returns as the entire HELOC Plan covers all aspects of Tax Deductions.
To qualify for HELOC, certain measures should be taken and considered.
- The amount owed as the mortgage for your home should be less than the actual cost of your home.
- The Credit Score to qualify for HELOC should be between 600 & 700 credit points.
- You should have a DTI ratio of 43 per cent or less than it.
- You should have ample income. Loan Providers often delve into your income streams to verify whether you’ll be able to pay the loan off.
- Be sure to have a bill-payment history set straight. Make sure to have an account of paying your bills on time.
Choosing HELOC can be the easiest decision to make when in need to get some extra cash out as a loaned amount. You can easily borrow up to 85% of your house value, deducting the amount you owe as a mortgage.
The New alternative for subprime financing
Subprime Loans are a thing of the past due to the economic collapse of 2008 when the loans were wrongly offered to ineligible borrowers which led to the mortgage breakdown. For this reason, a new form of underwriting for self-employed mortgagors called alternative financing was implemented. It is beneficial for borrowers with credit scores below 640 and who have reported income documentation situations.
Because of this, mortgage banking lenders usually price a higher interest rate than a prime mortgage to ensure the risks involved with loan services. These available loans are often Adjustable-rate mortgages (ARMS), therefore the designated rate of interest appointed can fluctuate depending on the market condition.
Does stated income loans still exist?
The simple answer to that is No. During that time, mortgagors were able to acquire loans without any verification of income and the undocumented mortgages resulted to be part of the downfall of the housing market. These mortgage products are now finely substituted with new alternative self-employed loans.
Self-employed
Self-Employed Loans are the most commonly utilized ones of all other loans. Not only are self-employed loans affordable for self-employed loaners, but also the most flexible ones. This loan is more likely to be based on a bank statement. Based on a mere bank statement, laon-receivers can refinance or buy a house without having to deal with tax returns or any congested documentation. They are more easier to acquire that standard ones.
Hard Money Loans/Private Money Loans
Hard Money Loan is a loan termed as the loan of last resort. These loans are secured in terms of utilizing the real legit property. The loan provider is a private company or a private group of investors whereas the banks are excluded. Hard Money Loans are also one of the easiest to attain types of commercial loans.
Private Money Lenders recommended by First Vision Real Estate & Financial Services provide flexible hard money loaning options. The best options with suitable interest rates and a high level of expertise in managing hard money loans.
First Vision Real Estate & Financial Services has hands-on experience in scouting and securing adequate hard loan providers as we understand the lending market trends as well as the preliminary caution needed against lending money to customers with poor credit scores.
Debtors who are denied conventional finance support or traditional loans due to unforeseen circumstances or inadequate credit scores can opt for hard money loans. They can acquire a hard money loan dependent on the value of equity possessed, destined to be introduced as guarantee/security.
When Bankers say No, Private Money Lenders say Yes!
Usually, hard money lenders are not cautious of the borrower’s credit scores. Property Flippers simply declare their equity as collateral which verifies that they will make it through the payments. Doing so, the equity being used as collateral becomes borrowed equity.
Private Money Loans can be used as a turn-around for decisive situations like foreclosure or eviction notices. Call it a kind of short-term financing provided by buyers, with low credit scores but sustained equity assets in property.
Hence, this financing can easily be utilized to maneuver through evictions and foreclosures.
*Real legit property: Property that is filed under the county district, including tax returns, & legalized property ownership.
Here at First Vision Real Estate & Financial Services, we provide all the possible options for Stated Income Home Loans California with suitable interest rates. All to ensure your safety, our expert team will evaluate whether the risk is favorable and assessable according to your financial situation.
FAQs
Q: Will I be able to get a Subprime Loan if my credit score is above 579?
Yes, as the eligibility criteria for this is a low credit score anywhere from 300 to 650 credits.
Q: What reassurances do I have regarding my physical assets when I apply for a Hard Money Loan?
The physical assets being used as collateral are signed off to trusted private money loan providers verified by First Vision Real Estate & Financial Services. You will still possess the ownership status and the assets will only be dissolved if & only if you fail to meet the contract agreements. So rest assured, no scam nor fraud shall befall you.
Q: Is HELOC profitable?
Yes, HELOC is profitable because HELOC works as a particular credit limit entertains the pliability of both leasing money and paying it off. You can use the home equity line of credit to pay off debt and all sorts of arrears.
Contact a Refinance Expert
Looking for assistance regarding refinancing matters? Ring us up at 310.649.2028 in the following timelines:
We’ll make sure your refinance experience with First Vision is no less than remarkable.
Our checklist and online resources assist you to the fullest so that the refinance process completes without any hindrance.
Here at First Vision Real Estate & Financial Services, we provide the best conventional loan options for refinancing and mortgages. Including such as FHA & VA loans.
Why Choose First Vision Real Estate & Financial Services?
Pay Off Your Mortgage Faster;
the earlier, the better.
You might think that paying off your mortgage faster is a complicated & demanding process. It is not as difficult as it sounds. First Vision Real Estate & Financial Services can make this process even easier for you.
- We encourage you to pay off your mortgage earlier so that you don’t have to pay a higher interest rate.
- Paying off your mortgage faster is the best decision if you can benefit from today’s lower interest rates as compared to when you had the mortgage.
- You will reduce your overall loan cost if you pay your mortgage faster. Always remember there is nothing as “good debt”. The sooner you get rid of the mortgage payments, the better it will be for you. You will be able to use extra interest money somewhere else too.
- You can use our Refinance calculator or Amortization calculator to check if you can save your money by lowering your interest rate or by changing your mortgage term.
- Mortgage can be paid off easily through various options such as cash-in refinance and 15 year fixed.
You may find many Mortgage companies in Los Angeles, but not everyone can guide and have that One-on-One relationship with you the way First Vision Real Estate & Financial Services does.
At First Vision Real Estate & Financial Services, we will help you to pay off your mortgage faster by laying out all your available options and by guiding you through them.
What options do you have to pay off your mortgage faster?
Some of the popular loan options to pay off your mortgage faster are:
15-year-fixed: As the name implies, the repayment time is fixed to 15 years. The interest rate is also fixed. So, you get to pay your mortgage faster at a fixed interest rate regardless of the current fluctuating interest rates.
15-years-FHA: 15-years-FHA is a great option for paying off your mortgage faster (15 years). It is suitable for people who have less equity in their homes and the ones who are looking for refinancing options that have minimum credit score requirements. It requires a minimum FICO score of 580.
VA loans: Veteran Affairs loans are an excellent option for military service members and veterans, who are planning to shorten their mortgage term. With VA loans, you can refinance around 120% of your house’s worth if you don’t opt to cash out and about 100% of your house’s worth if you opt to cash out.
FAQs
- What is the advantage of paying off my mortgage faster?
The biggest advantage of paying off your mortgage faster is that you will have to pay a lesser interest. In addition to that, you will be able to claim ownership of your house sooner. All in all, you will stand in a better place financially. - Is there a downside to paying off my mortgage early?
The only downside of paying off your mortgage earlier is that you will have to pay an increased amount every month. The increased monthly mortgage payment will help you to pay off your loan faster. - Will the overall loan cost reduce by shortening my mortgage term?
Yes! Shortening your mortgage term will reduce your overall loan cost as you will save interest money. The sooner you pay the mortgage, the less interest you will have to pay.
Debt Consolidation
Debt consolidation is a type of refinancing loan, which is used to clear out your other loans. Consolidating your debt will help you to pay off your loans at a lower interest rate.
- Debt consolidation is a wise move because interest rates these days are relatively low. Don’t take much time thinking as rates fluctuate, who knows when they get high again.
- By this type of refinancing, you will get cash to pay your other debts, even the high-interest ones.
- Combine all your debts in one single monthly payment. You will have to pay one monthly mortgage payment rather than many.
- Your interest rate might be lowered by consolidating your debts, which will reduce your monthly payment as well. By doing so, you will be able to pay off your debt faster.
- By debt consolidation, you can improve your credit rating as well.
- You can either lower your monthly mortgage payments or opt to cash out. Whichever option you use, the result will be similar. You will pay off your loans in one single payment and at a lower interest rate.
First Vision Real Estate & Financial Services will guide you step by step in debt consolidation, even if you have a low credit score. Just contact us, and we will help you consolidate your debts.
What are the options for Debt Consolidation?
- FHA Loan: Consolidating your debt into an FHA loan means that you opt for a low-cost loan to pay off your other debts.
- 15-year fixed-rate loan: By refinancing to a 15-year fixed-rate loan, you can pay off your mortgage faster and enjoy a fixed interest rate.
- 30-year fixed-rate loan: With a 30-year fixed-rate loan, you will have lesser monthly mortgage payments and a fixed interest rate.
- VA loan: If you are a service member or veteran, you can enjoy low fixed rate debt consolidation.
FAQs:
- When should I consider debt consolidation?
You should consider refinancing by debt consolidation when the interest rates are low. It will help you to pay off your loans at a lower interest rate. - Can refinancing help me to consolidate my high-interest debts?
Yes, refinancing can help you consolidate your high-interest debts. Debt consolidation is all about paying off high-interest debts with lower interest debt. The average interest rate on credit cards is around 15%, whereas the interest rate on a mortgage is approximately 3-4%. So that means you can pay off your high-interest credit card debt by refinancing your mortgage.
Get Cash out of your Home
Cash-out refinancing is tapping into your home equity to get cash. You replace your existing loan with one of greater value (by taking advantage of your home equity), replace your mortgage with a one of higher value, and pocket the difference.
Cash-out refinance is home equity line of credit to pay off debt.
- Pay high-interest loans with the cash that you get.
- Use the cash to make improvements to your home, pay your bills, or you can invest the money somewhere else.
Whatever your reason for cash-out refinance is, First Vision Real Estate & Financial Services is here to make the whole process seamless for you.
Famous Cash-Out Refinance Options
- FHA loan: With an FHA loan, you can refinance up to 80% of your house’s worth.
- 30-year fixed-rate loan: With a 30 year fixed plan, you can refinance 97% of your house’s worth.
- VA loan: You can refinance 100% of your house’s worth if you opt to cash out with VA loans(only if you are a veteran or a service member).
FAQs
- What is equity, and what is its role in cash-out refinancing?
Equity is the difference between your house’s current value/worth and the mortgage you have yet to pay. For example, if your house’s current value is $100000 and you owe $50,000 of mortgage, you have an equity of $50,000 over your house. In cash-out refinancing, you take advantage of the equity you have and refinance your loan to a one of higher value. - When is it smart to do a cash-out refinance?
It is smart to opt for a cash-out refinance when you have considerable equity over your home and want to obtain a significant sum of money. If you want a lower interest loan, then cash-out refinancing is also the way to go.