Use this home equity loan calculator
to determine your ultimate credit limit (the total amount you
can borrow from a home equity loan). Enter the current value of
your home, the loan to value ratio (usually provided by your lender)
and the remaining mortgage balance that you have to pay off. This
will tell you the total home equity loan you are eligible for.
In Step 2, enter the # of years you want to amortize the loan
for, the maximum is 20 years. This will calculate the APR (Annual
Percentage Rate) that you will have to pay, as well as the monthly
home equity loan payment. Enjoy!
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It is important to get pre-approved for a mortgage
loan because most real estate agents will not show
you any properties unless you have that letter. Getting
a pre-approved letter will avoid all the hassle, lessen
your closing costs and what's best, the process is
free!
Note: Do not settle for a "Pre-Qualified"
mortgage because that means nothing. You have to be
pre-approved, not pre-qualified!an
-> If you have a down payment
of less than 20% on your home, you have to get Private
Mortgage Insurance (PMI) that protects your lender
from your defaults. This PMI could potentially add
several hundred dollars to your monthly mortgage bill.
To get your way around that, mortgage brokers often
recommend two loans; a primary mortgage for 80% and
a home equity loan for the remaining 20%. The home
equity loan will serve as the 20% down payment clause
and avoid you having to purchase PMI. This idea was
sound when interest rates for home equity loans were
like 5%, which matches to that of mortgage loans.
However, interest rates on home equity loans now hover
between 7% - 9%, which makes them a less popular deal.
You would actually be better off buying PMI than taking
out a home equity loan.
-> The credit bureaus
literally receive millions of pieces of information
every day about consumer's buying habits, defaults
and late payments. This makes them very prone to errors.
Infact, 60% of all credit reports contain atleast
1 error. Therefore, it is advised to check every entry
that appears on your credit report.
