There are a number of things you can improve in your home that will increase your home’s value. You can add a bathroom, finish your basement and renovate your kitchen – just to name a few.
Unexpected home improvements like a new roof can be an expensive surprise.
Rather than waiting until your home is in need of repairs, consider a home audit to look for ways that you can improve your home and increase its value.
Home improvement loans are now available at historically low rates. The best way to obtain a low rate home improvement loan is through a mortgage. Using your home as security will enable you to secure lower interest rates than if you used an unsecured line of credit.
The type of home improvement loan you should apply for depends on the size of improvement you want to finance. A small renovation of $15K-$30K could easily be financed through a home equity loan or line of credit.
If you are financing a large renovation, refinancing your first mortgage may make more sense.
If you have had issues with credit, are self-employed or cannot prove your income, this will make things more difficult. These three things make you a higher risk to a potential lender; in turn you will need to have equity in your home.
Before you prepare to apply for renovation financing, consider what other existing debt you have. This may be a good time, if you are going to refinance your mortgage, to consolidate your debt. This will free up cash flow and reduce the interest you are paying on existing credit cards.
The next thing you may want to do is consider requesting your credit report from Equifax. This way you can see what lenders will see before you even begin looking for home improvement refinancing. If you can find places to improve your credit (for instance paying down a credit card balance that is close to or at its limit), do it. This could save you big. The stronger your credit is, the lower the interest you will pay.
Even in cases where consumers have bad credit, the interest for a bad credit home improvement loan or refinanced mortgage is still less interest than bad credit loans offered by finance companies. If you are thinking of financing a home improvement using your home, consult a mortgage broker. They will be able to discuss your financial options and negotiate the best deal for you. For more information visit http://www.firstequity.ca or call 416-440-1224 ext. 22.
Showing posts with label equity. Show all posts
Showing posts with label equity. Show all posts
Monday, May 2, 2011
Monday, April 11, 2011
Equity Mortgage? You Hear About Them all the Time, but what are they?
Equity in the context of mortgage financing is defined as “the market value of a debtor's property in excess of all debts to which it is liable”.
The more equity you have in your home, the less risk that you represent to a perspective lender. Folks who have bad credit or difficulty proving their income will require a larger down payment to purchase a home or more equity in order to refinance it, then someone who didn’t have these issues.
The reality is that there is such a large percentage of the population who have accumulated an unmanageable amount of debt, have had issues with credit, or are self-employed with difficulty proving their income; that some lenders will offer an “equity mortgage” or “equity only mortgage”.
In these circumstances the lender will base their decision solely on the amount of equity in your home and not look at your income, debt load and credit products. Most lenders will not grant a high risk equity only mortgage that exceeds 80% the value of the home.
Also an equity mortgage will bear a higher interest rate, than prime rate mortgages offered by the bank. Equity mortgages are offered by a number of different types of lenders. These include mortgage investment corporations, trust companies, finance companies and private individuals.
Obtaining a refinance equity mortgage is a fairly simple process and goes as follows:
- Mortgage application is made
- Mortgage application is preliminarily approved
- Appraisal of the property is ordered and mortgage statements
- Applicant signs mortgage documents
- Applicant signs documents with the lawyer
- Funds are dispersed
The entire process takes approximately 2-3 weeks. A relationship with a mortgage broker who also lends their own money is a huge benefit. This eliminates layers of referrers that ultimately results in more fees to you. Ontario Mortgage Brokers like First Equity specialize in subprime equity mortgage financing and also lend money too. For more information visit www.firstequity.ca or call David Mandel at 416-440-1224 ext 22.
The more equity you have in your home, the less risk that you represent to a perspective lender. Folks who have bad credit or difficulty proving their income will require a larger down payment to purchase a home or more equity in order to refinance it, then someone who didn’t have these issues.
The reality is that there is such a large percentage of the population who have accumulated an unmanageable amount of debt, have had issues with credit, or are self-employed with difficulty proving their income; that some lenders will offer an “equity mortgage” or “equity only mortgage”.
In these circumstances the lender will base their decision solely on the amount of equity in your home and not look at your income, debt load and credit products. Most lenders will not grant a high risk equity only mortgage that exceeds 80% the value of the home.
Also an equity mortgage will bear a higher interest rate, than prime rate mortgages offered by the bank. Equity mortgages are offered by a number of different types of lenders. These include mortgage investment corporations, trust companies, finance companies and private individuals.
Obtaining a refinance equity mortgage is a fairly simple process and goes as follows:
- Mortgage application is made
- Mortgage application is preliminarily approved
- Appraisal of the property is ordered and mortgage statements
- Applicant signs mortgage documents
- Applicant signs documents with the lawyer
- Funds are dispersed
The entire process takes approximately 2-3 weeks. A relationship with a mortgage broker who also lends their own money is a huge benefit. This eliminates layers of referrers that ultimately results in more fees to you. Ontario Mortgage Brokers like First Equity specialize in subprime equity mortgage financing and also lend money too. For more information visit www.firstequity.ca or call David Mandel at 416-440-1224 ext 22.
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