What is a Home Equity Loan?
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There are a ton of reasons for homeowners to consider a refinance home loan and simply “lowering the mortgage rate” is just one of many ways these types of home loans can save you money. Maybe you need to swap an existing mortgage from an adjustable-rate to a fixed-rate. Maybe you’re looking to configuring a debt consolidation home loan. In these situations and more, the right mortgage refinance can save you boatloads of cash.
Considering a Second Mortgage Loan?
How to Get a Home Equity Loan
Let’s make one thing clear right off the bat: Although a second mortgage loan is often an alternative route to a refinance mortgage, a second mortgage is not the same thing as a refinancing home loan. While this option isn’t available to all borrowers, a second mortgage can be a solid choice for those with enough home equity and the right credit score.
Understand FHA Debt Consolidation & FHA Cash Out Refinance Guidelines
Those looking to consolidate debt or simply utilize their existing home equity to fund home improvements may benefit from an FHA cash out refinance. The FHA cash out refinance option has many advantages over conventional loan refinance programs. For example, with an FHA cash out refinance second mortgage, you can utilize up to 85 percent 4 of the total appraised value of the home (compared to just 80 percent with Fannie Mae or Freddie Mac). This enables borrowers to further tap into their existing home equity and maximize this latent value to pay for improvements, or to shore up a college fund or thin retirement plan.
Combo Loans, Conventional Loan Credit Scores, & Private Mortgage Insurance
The market is brimming with numerous types of home loans to choose from and a so-called “combo loan” or “piggyback loan” is another common option. With a combo loan, the total is broken down into two separate loans. The borrowed amount is split at the conforming loan limit and then a second loan is added to this.
But why use two loans rather than one?
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Review Your Options
We conduct a Total Cost Analysis to determine your optimal mortgage strategy.
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