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Home Equity
What
is a Home Equity Loan? A
Home Equity Loan sometimes referred to as a HELOC is a loan based upon the
available equity you have in a property.
For example: If your home is
worth $100,000 and you currently owe $75,000 on it, then you have $25,000 of
available equity to borrow from. Home
equity loans and lines of credit usually are repaid in a shorter period than
first mortgages. Most commonly, mortgages are set up to be repaid over 30
years. Equity loans and lines of credit often have a repayment period of 15
years, although it might be as short as five or ten and as long as 30 years. The
interest rate on a Home Equity Line of Credit (HELOC) is based on prime (the
rate the Federal Reserve charges banks) plus a margin (the margin of profit
incorporated into your loan by the lender) which is based upon your credit
worthiness and various other factors. Some
of the benefits are: ·
A smart
alternative to high interest credit cards.
Would you rather pay 15% or 8% to use the same amount of money? ·
The interest
may be tax deductible unlike the interest charged on credit cards and auto
loans. ·
An easy to
use and access line of credit that may be used for a multitude of purposes:
investment, vacation, a new car, etc. Click here
to find out how much equity you have available. |
Properties for
Want to list a property in this
section? Send us an e-mail
with a link to pictures or provide basic information to be posted in this
section. Send us an e-mail Single Family Homes Asking Price: $199,500 Own this home for just
$1180 per month! Investment Properties 2 Family $145,500
Condo $150K 4 Fam $150K Contact
Seller Manufactured Homes Modular Home $50K ------------------------- |
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Market Conditions
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Mortgage Industry
Equity Composite National Mortgage News has compiled a Mortgage Industry
Equity Composite, intended to reflect developments in the mortgage industry.
The Composite includes stocks representing all major segments of the
industry: banks, thrifts, non-depository lenders, GSEs,
mortgage insurers, title insurers, technology vendors, commercial real estate
finance companies, builder-lenders, sub-prime and
high- |
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Being bombarded by mortgage companies and brokers can
become confusing, between interest rates, closing costs, points and
experience – How can a person make an intelligent decision? Advice: Key word “intelligent”. More often than not, most consumers make
there buying decision on who ever rubs them the right way. While this may do wonders for your ego, you
could end up paying for it – literally.
When making a financial decision, that decision should be based on the
numbers. But which numbers you
ask? Most mortgage brokers are in the
habit of “hiding” their fees – this is because most believe that customers
would throw a fit, and they usually do.
This comes from the fact that most customers have no idea what would
be considered a normal fee, therefore they can not intelligently determine if
they are being over-charged or not.
Let’s establish a few facts first.
First of all, the broker’s fee is a percentage of the loan. If you are
speaking with a Loan Officer who works for a Broker, that Loan Officer is
only getting a percentage of a percent typically 35 – 50%. That means the
higher the loan amount, the more money the broker should make. This percentage is often called points, 1
point = 1 percent. What is fair? On a $200,000 loan 2 points ($4000 out of
which your Loan Officer will make 35 – 50% or $1400 - $2000 far less than what a Real Estate Agent
would make: 3.5 – 7% in their pocket) would be considered
reasonable. Because this is a
percentage, the number of point you are charged most likely will be higher on
lower loan amounts and lower on higher loan amounts (the law limits this to
3% on conforming loans above 640 credit and 6% on non-conforming below 640
credit). Typically, you can expect
higher points if your loan is a difficult file or will require special
attention. Points are charged “up
front” and represents the total of your “Loan Origination Fee”, “Mortgage
Broker Fee” and sometimes hidden under the title “Loan Discount”. In addition, there are a number of third
party fees that all borrowers must pay no matter who you go through
(approximately $2500 before the broker has charged you a single penny!). So don’t let closing costs fool you. No matter what any broker or banker tells
you, trust me – you will pay these fees.
There is only one other way for your broker to get paid: “on that
back” through what is called Yield Spread Premium (YSP). This translates into a higher interest rate
for you and most likely will increase your monthly mortgage payments. This is completely hidden from the borrower
and difficult to determine. Most
brokers will use a combination of these: points and ysp. If your broker is fair, you should have
lower points with higher ysp and higher points with
lower ysp.
Unfortunately, a few brokers will max out both fees. I refer to this practice as
“head-busting”. So is it better to go
ahead and pay the fees up front or on the back? If
you plan to be in the home for more than 2 years it is always better to pay
the points; if you will be there less than 2 years or if you are making a
purchase and don’t have money for a down payment, it is better to pay on the
back. Always obtain a good faith estimate so that you may
identify these fees. Also, be aware
that brokers are not required to fully disclose this information on your Good
Faith (although they should!) and it can be difficult to determine if it is
just the old bait and switch. Beware
of any lender who claim “no points” or “no closing costs”, since they have to
get paid one way or another, you will be the one paying for it one way or
another. Save yourself a lot of hassle
and time by working with one of our professionals. Subject: Pay-Option ARMS There's a growing wave of refinances sweeping certain
segments of the business: payment-option ARMs. Too many consumers are opting to make only
the minimum payment on these loans to increase spending money without regard
to negative amortization. Advice: If you decide to take advantage
of the lower payment offered by a pay-option |
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| Refinance | Home Equity | Debt
Consolidation | Home Purchase
| Commercial
Property | |
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|
Tools | St Louis City Database
| St Louis County Database | St
Charles County Database | | Property
Values | Amnet Rates | ARM Indexes | Advantage Credit | Mortgage Calculators | | St
Louis Post Dispatch Listings | Craig’s
List | List
in Classified | Mortgage Leads
| Keywords
| | Google
Ad Words | Top Keywords
| Check Form Values | Email | |
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Links | Best
Quotes Free | Appraiser
| Financial Advisor | Graphic Design | Refinance Saint Louis | | Wanna
Network | |
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