Home equity loans

Self-employed consumers looking to access the equity that has built up in their homes - whether for investment purposes, to access capital for their small business enterprise, or merely to consolidate debts at a lower interest rate- quickly run into the sometime perplexing requirements to qualify for a stated income home equity loan. Unlike borrowers who are otherwise employed and can provide lenders with pay slips that readily set out their income stream, small business owners, entrepeneurs and commission-based salespersons face a slightly more daunting process in qualifying for a second mortgage or secured line of credit that will free up their home equity.

Stated income home equity loans are structured to assist self-employed consumers and business owners overcome the difficulty of meeting the regular mortgage approval criteria that banks, financial institutions and mortgage lenders look to. Perhaps the key for the self-employed individual seeking to qualify for a home equity loan or secured line of credit process is the self-employed business persons debt service ratio.

Whereas consumers with a fixed employment income have relatively few business write-offs, the self-employed have a myriad of legitimate tax write-offs that affect their income stream. Lenders accordingly want to look at the revenue stream that the self-employed have to service their existing debt load. Mortgage lenders each have a set debt service ratio - a threshold that the ratio of monthly income to expenses (including mortgage and loan payments) - which cannot be exceeded in order to qualify for a stated income loan. Proving one's income stream and qualifiying a stated income mortgage under a lender's DSR is a more complicated process than qualifying for a regular mortgage but need not be prohibitive. Continue reading →

It is difficult to manage the finances with the ever-increasing default rates and delinquencies. The prospect to having to pay many bills of different amounts every month from the existing loans to medical expenses, credit cards and so on can be of great pain. It is not only difficult to have a track of all the expenses and bills but also the cumulative costs can sum up to a big amount. This is where the home equity loans might come to the rescue, as it helps to pay only one bill every month.

Home equity loans may help get the finances organized and also to plan accordingly. Home equity loan makes debt consolidation possible. Home equity loan lets the person to have the flexibility of planning ahead for other living needs through debt consolidation. Outstanding loan amounts, credit card bills and other kinds of liabilities may involve paying high interest rates and expenditure. A home equity loan helps in paying off the entire debts and also allows keeping some cash in hand. This leaves the person with high earning balance, which is got after the deduction towards monthly repayment of home equity loans. Hence home equity loans are said to be the best method for consolidating loans with higher interest rates.

Home equity loan provides an opportunity for the house owner to borrow money by producing collateral in the form of pledging the house. The loan is obtained without any strain even if the applicant has a bad credit because the lender views it very safe to provide loans having the house as collateral. The money borrowed is also more making it very useful to clear off debts with higher interest rates. Continue reading →

When looking into equity release it is essential that you seek the advice of a specialist such as a financial advisor. A financial advisor will be able to assist you in determining whether this step is the right step for you. The first thing you should know is that equity release should be considered as a last resort option.

Equity release is the process through which you can obtain cash. You do this through the value of your home. Here is what you get, the right to retain the home until you die or move into care and you do not have to repay the equity until you home is sold. Sounds like a great deal but is it really. For some it may be the only option but because of the actual break down of expense it is one of the most expensive ways you can raise cash.

What can the cash obtained through equity release be used for? The answer is just about anything you can think of. It can help with Inheritance Tax planning or any other type of assistance you may need. Here is how it works. There are two primary ways that equity release works. The first is Reversion and the second is Lifetime mortgage. Continue reading →