The idea of being upside down on a vehicle is not that new. This commonly occurs when a consumer makes the decision to purchase a new vehicle before they have paid off their existing one. As a result, the balance of the loan on the existing vehicle is added to the note for the new […]
Home Equity Loans: Things You Should Know
Great Benefits, Serious Risks – A loan secured by a homeowner’s “equity” can be an economical way of borrowing money because the interest rate is typically low and, for many people, the interest paid will be tax deductible. However, there’s a big risk… Have questions about home equity loans not answered here? Use our comment […]
Second Mortgages: Are They Twice as Much Trouble?
A second mortgage, the second loan secured against the home, and second in importance to the first, means that should the borrower not be able to pay off the loan in full and the bank or money lender repossessed the home to recoup their losses, the first loan would be paid off first and the […]
Debt Consolidation Loans Becoming More Common
The housing slump has sent home values plummeting, and it has left an ever-growing number of homeowners upside down in their mortgage loans: They now owe more on their mortgage than what their homes are worth. This unfortunate economic reality has led a growing number of consumers to debt consolidation loans to help reduce the […]
Strategic Defaulters Opt to Continue Paying on 2nd Liens
Borrowers who strategically default on their first mortgage often continue to pay on home equity lines of credit, according to a new white paper from two authors with the Philadelphia Federal Reserve. Data for the study came from a large random sample of individual credit records drawn at the end of each quarter from Equifax, […]
Reverse Mortgages May Become More Affordable
The Federal Housing Administration (FHA) announced recently that it intends to make modifications to its Home Equity Conversion Mortgage (HECM), a reverse mortgage loan insured by the federal government, to make it more attractive and cost effective for older home owners looking to tap their home equity. A HECM is a reverse mortgage that is […]
Borrowing Equity in Your House to Consolidate Debt
Like many people these days, you may be having problems with your monthly bills. As economic times get hard, interest rates rise. This makes your credit card payments go up. Not only do the payments rise, but you pay less on your balance. This makes it much harder to pay them off. What was once […]
Comparing a Home Equity Loan to a Second Mortgage
Comparing a Home Equity Loan to a Second Mortgage A home-equity loan and a second mortgage are very similar. Both use the equity you have in your existing property as collateral for a new debt. The main differences between the two options are in the structures of the liens and the payment schedules. Lien Structure […]