Home Equity Loans 101
By Frank Kelly
A secured home loan differs from an unsecured loan in that the
secured loan borrows against one's home as collateral, thereby
reducing the risk to the lender.
As such, secured home loans often offer better interest rates
than unsecured loans, but offer higher risk to the borrower, as
defaulting on these loans can have greater consequences, such as
fines, or even possible repossession of the home originally put
up as the secured collateral (subject to the amount of the
loan, of course).
As the interest rates for secured home loans are usually
significantly lower than unsecured loans, more of the monthly
payment goes towards paying off the capital, rather than paying
the accrued interest.
The monthly payments are often more flexible in secured loans,
affording the borrower more leeway in working out a payment plan
that fits his or her needs. However, care must be taken not to
use this as justification for taking out such a loan, as it is
a financial contract between lender and borrower.
There can be a number of reasons for taking out a secured
loan, such as debt consolidation of high-interest loans,
financing for remodeling, or repayment of college or car loans.
Most lenders offering these types of loans recommend loan
repayment insurance, to guard against an inability to pay on
the loan for a time due to factors such as illness, losing a
job or other unexpected occurrences.
Before taking on a substantial loan such as a secured home
loan, a careful analysis of personal finances is in order.
Having a friend or an accountant or finance officer assist in
this process can save trouble and headaches later, as they may
bring up issues and/or expenditures unthought-of, issues such
as examining how much is spent on morning mochas at a favorite
coffee shop? An outside perspective can often help clarify
these matters so a better-informed decision can be made.
If proper planning and care is taken, a secured home loan can
be a valuable tool for managing personal debt. Talking to a
loan officer or financial advisor at a major lending
institution can help make these possibilities a reality, and
can be a step towards the realization of financial freedom.
About the Author: Frank Kelly is a freelance writer. Years ago
he was an employee who regularly used payday loans to get thro
the month. Then he disocvered the better alternative of a home
equity loan. Discover useful advice and information about home
equity loans. Website contains articles and advice about home
equity loans. Click ==> http://www.homeequityloans-cheap.com/
Source: http://www.isnare.com
Tuesday, June 12, 2007
Sunday, June 10, 2007
Home Equity Loans – Beware Of Appraisal Fraud
Home Equity Loans – Beware Of Appraisal Fraud
By Charles Essmeier
A new report by the independent Demos group has revealed what
may not be a surprise to many people – corruption is rampant in
the home appraisal industry. The bust in the dot-com market of
some five years ago has left would-be lenders with a surplus of
cash to lend. This has led to a huge boom in both mortgage and
home equity loan lending. That’s not a bad thing; a record 69%
of Americans now own their own homes. Owning a home is easier
than ever; in 2004 the average down payment was a record low of
only three percent.
So if everyone is buying a home, and loans are easier to obtain
than ever, what is the problem? The problem is that nearly 55%
of the appraisers polled in the survey said that they had been
pressured by lenders to deliver appraisals that met a “target”
value. The appraisers said that failure to meet the “target”
value resulted in either their not being paid, or not being
hired again. Since most appraisers want to keep working, they
have had a tendency to meet the target value, even if it means
that they have overestimated the value of the property. This
drives prices artificially higher and leaves many homeowners
with mortgages that may be worth more than the homes they were
meant to finance. This problem becomes acute should the owner
need to sell the home, only to discover that it isn’t worth as
much as he or she owes on it.
The worst-case scenario to result from this would be a burst in
the current real estate “bubble” and a nationwide collapse in
home values, leading to massive foreclosures. This probably
will not happen, but there are several things prospective
borrowers can do to avoid being caught in the appraisal trap:
# *Become educated about the appraisal and lending process. The
more informed you are, the less likely you are to be caught in a
scam.
# *Be aware that refinancing your home isn’t a cure to all
problems. It may seem appealing to use the equity in your home
for such uses as debt consolidation but if the result of that
is that you owe more on your home than it is worth, you
probably haven’t gained anything.
# *Be active in the appraisal process. Talk to the appraiser,
and ask to see the finished appraisal, along with the data used
to create it. Appraisals are based in part on the sales of
similar properties in your area. Check them out yourself and
compare the home you saw with the stated appraisal value.
# *Be bold. Ask your lender if they pressure their appraisers
to provide inflated values. You might not get an honest answer,
but pay attention to how they respond. You might be able to
determine if they are lying.
Ultimately, if you take out a home equity loan or a mortgage
for more than your home is worth, you are the one that suffers.
That can be easily avoided if you simply pay more attention to
the process and educate yourself about the possible pitfalls.
The last thing you want to lose is your home.
About the Author: ©Copyright 2005 by Retro Marketing. Charles
Essmeier is the owner of Retro Marketing, a firm devoted to
informational Websites, including http://www.End-Your-Debt.com/
and http://www.HomeEquityHelp.net/
Source: http://www.isnare.com
By Charles Essmeier
A new report by the independent Demos group has revealed what
may not be a surprise to many people – corruption is rampant in
the home appraisal industry. The bust in the dot-com market of
some five years ago has left would-be lenders with a surplus of
cash to lend. This has led to a huge boom in both mortgage and
home equity loan lending. That’s not a bad thing; a record 69%
of Americans now own their own homes. Owning a home is easier
than ever; in 2004 the average down payment was a record low of
only three percent.
So if everyone is buying a home, and loans are easier to obtain
than ever, what is the problem? The problem is that nearly 55%
of the appraisers polled in the survey said that they had been
pressured by lenders to deliver appraisals that met a “target”
value. The appraisers said that failure to meet the “target”
value resulted in either their not being paid, or not being
hired again. Since most appraisers want to keep working, they
have had a tendency to meet the target value, even if it means
that they have overestimated the value of the property. This
drives prices artificially higher and leaves many homeowners
with mortgages that may be worth more than the homes they were
meant to finance. This problem becomes acute should the owner
need to sell the home, only to discover that it isn’t worth as
much as he or she owes on it.
The worst-case scenario to result from this would be a burst in
the current real estate “bubble” and a nationwide collapse in
home values, leading to massive foreclosures. This probably
will not happen, but there are several things prospective
borrowers can do to avoid being caught in the appraisal trap:
# *Become educated about the appraisal and lending process. The
more informed you are, the less likely you are to be caught in a
scam.
# *Be aware that refinancing your home isn’t a cure to all
problems. It may seem appealing to use the equity in your home
for such uses as debt consolidation but if the result of that
is that you owe more on your home than it is worth, you
probably haven’t gained anything.
# *Be active in the appraisal process. Talk to the appraiser,
and ask to see the finished appraisal, along with the data used
to create it. Appraisals are based in part on the sales of
similar properties in your area. Check them out yourself and
compare the home you saw with the stated appraisal value.
# *Be bold. Ask your lender if they pressure their appraisers
to provide inflated values. You might not get an honest answer,
but pay attention to how they respond. You might be able to
determine if they are lying.
Ultimately, if you take out a home equity loan or a mortgage
for more than your home is worth, you are the one that suffers.
That can be easily avoided if you simply pay more attention to
the process and educate yourself about the possible pitfalls.
The last thing you want to lose is your home.
About the Author: ©Copyright 2005 by Retro Marketing. Charles
Essmeier is the owner of Retro Marketing, a firm devoted to
informational Websites, including http://www.End-Your-Debt.com/
and http://www.HomeEquityHelp.net/
Source: http://www.isnare.com
Saturday, June 9, 2007
How Home Improvement Can Help You Increase The Value Of Your House
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
If you are selling your own home, you, undoubtedly want to increase the value of your home as much as possible before putting it on the market.
(There is a link to download a free ebook, that gives you 101 Tips For Selling Your House, at the bottom of this page).
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
The more of these tips you can follow, the more your house will be worth.
When you start thinking of ways to increase the value of your for sale by owner home, you think of home improvements.
Indeed improving certain aspects of your for sale by owner home will increase the value, thereby allowing you to increase your asking price. Before you start knocking down walls and adding on new bedrooms, there are a few guidelines to take into consideration.
Improvements done to for sale by owner homes do not always provide the highest return on investment.
If your house is in good condition, improvements probably won't increase your for sale by owner home value dollar for dollar based on the cost.
For example, if you spent $1,000 making improvements to your home, you couldn't necessarily increase your home price by $1,000. Home improvements DO increase the value of a home that is in poor condition.
If you are thinking about doing some repairs or renovations, the best rooms are kitchens and bathrooms.
These are the two rooms that buyers are most concerned about looking up to date. In many cases, you can do minor work to both of these rooms and receive a greater value in the home than if you did a major remodeling job.
Of all the improvements you can do to your for sale by owner home, minor remodeling of your kitchen has the most payout. Next on the list is adding a bathroom, major kitchen remodeling and adding a family room. There is an even lower payout for adding a deck or replacing windows or siding.
The best rule of thumb when you are selling a for sale by owner home is to avoid doing home improvements unless the condition of the house is so poor that you can't sell it otherwise. Some of these items will come up in a home inspection or appraisal. Others you might be able to easily identify.
For example, if the for sale by owner home has a leaky roof, it must be repaired or replaced before you can sell it. There are few buyers that will purchase a home with a roof that leaks.
Some improvements can be completed if you can do it yourself for a lower cost. You can expect to get the same type of increase in the value of the for sale by owner home.
This gives you a much better return on the investment you put into the home. Be careful though, poor home improvements will end up decreasing the value of the home rather than increasing it. Poor work ends up costing you more in the end, not only because of the money spent on the improvement, but also because of the resulting decrease in for sale by owner home value.
If you are selling your own home, you, undoubtedly want to increase the value of your home as much as possible before putting it on the market.
(There is a link to download a free ebook, that gives you 101 Tips For Selling Your House, at the bottom of this page).
Increasing your home's value means that you can increase your asking price, ultimately resulting in a larger profit from the sale of your home.
The more of these tips you can follow, the more your house will be worth.
When you start thinking of ways to increase the value of your for sale by owner home, you think of home improvements.
Indeed improving certain aspects of your for sale by owner home will increase the value, thereby allowing you to increase your asking price. Before you start knocking down walls and adding on new bedrooms, there are a few guidelines to take into consideration.
Improvements done to for sale by owner homes do not always provide the highest return on investment.
If your house is in good condition, improvements probably won't increase your for sale by owner home value dollar for dollar based on the cost.
For example, if you spent $1,000 making improvements to your home, you couldn't necessarily increase your home price by $1,000. Home improvements DO increase the value of a home that is in poor condition.
If you are thinking about doing some repairs or renovations, the best rooms are kitchens and bathrooms.
These are the two rooms that buyers are most concerned about looking up to date. In many cases, you can do minor work to both of these rooms and receive a greater value in the home than if you did a major remodeling job.
Of all the improvements you can do to your for sale by owner home, minor remodeling of your kitchen has the most payout. Next on the list is adding a bathroom, major kitchen remodeling and adding a family room. There is an even lower payout for adding a deck or replacing windows or siding.
The best rule of thumb when you are selling a for sale by owner home is to avoid doing home improvements unless the condition of the house is so poor that you can't sell it otherwise. Some of these items will come up in a home inspection or appraisal. Others you might be able to easily identify.
For example, if the for sale by owner home has a leaky roof, it must be repaired or replaced before you can sell it. There are few buyers that will purchase a home with a roof that leaks.
Some improvements can be completed if you can do it yourself for a lower cost. You can expect to get the same type of increase in the value of the for sale by owner home.
This gives you a much better return on the investment you put into the home. Be careful though, poor home improvements will end up decreasing the value of the home rather than increasing it. Poor work ends up costing you more in the end, not only because of the money spent on the improvement, but also because of the resulting decrease in for sale by owner home value.
Friday, June 8, 2007
Home Loans Use For Maximum Benefit
Home Loans Use For Maximum Benefit
By Joseph Kenny
While home loans can put you in serious debt if you don't use
them properly, there are a number of ways you can use them to
work to your advantage. In this article I will go over some
things you can do with your home loan to improve your personal
finances. The first thing many people do is use their home
loans to consolidate other loans they have.
Home Loans are Cheap!
While this is a common method that is used to lower monthly
payments, there are also some risks involved. Home loans are
good because they can allow you to combine your credit cards
and other loans into one monthly payment that may be lower. The
interest rate may also be lowered as well. At the same time,
this may not always be the case, and some people use their home
loans for consolidation only to find that the interest rate is
higher. It is important to do your research to make sure you
bills will be lower once you've consolidated your debt.
Loan Consolidation
In addition to the money you will save with a home loan, you
will also have more income at your disposal. This money can be
saved or you may choose to invest it. Using a home loan for
debt consolidation can also improve your credit over the long
term, because your low monthly payment will make you less of a
risk to lenders. When you have a large amount of debt, your
credit could end up damaged. However, homeowners who don't
exercise discipline could find themselves in more debt. You may
also want to look at debt counseling service to learn how to
keep your debt under control.
The One and Only
Once you have used your home loan to consolidate your debt, it
may be a good idea to begin using cash as much as possible. If
the home loan is still outstanding, avoid taking out any more
loans. Another great use for home loans is home improvements.
Your house is an investment, and the more you put into it, the
more you will get back. Adding improvement to your home can
greatly increase its value, and you could earn a lot of money
if you decide to sell it one day.
Drawbacks of the Home Loan
The only problem with home improvement is making the wrong
choices. You want to spend money-improving areas that will
greatly increase the value of the home. Remodeling either the
kitchen or bathroom will bring the most value to your home. You
want to make sure the improvements you make enhance the beauty
of the home. While adding carpet and paint to the home won't
greatly increase the value, it will make the house easier to
sell if it is done properly.
However, it is important to remember that lenders who know you
are trying to sell your home are not likely to give you a home
loan. If they do, you can expect to have more costs. It is also
important to remember that if you sale the home, you will need
to make enough to cover the mortgages and other costs. Another
good use for home loans is paying for the cost of education for
your children. Like home improvements, using a home loan to pay
for the cost of education can be an investment. It can keep
your children out of debt.
Despite this, many parents will be nearing retirement when
their children head to college. Some parents may need the home
loans to deal with the effect of not having an income from a
job. The last thing that many people do with home loans is buy
things they want, such as a boat or a nice car. If you get in a
situation where you have medical bills, a home loan may also be
able to help you.
About the Author: Joe Kenny writes for the loan comparison
sites http://www.selectloans.co.uk and also
http://www.ukpersonalloanstore.co.uk
Source: http://www.isnare.com
By Joseph Kenny
While home loans can put you in serious debt if you don't use
them properly, there are a number of ways you can use them to
work to your advantage. In this article I will go over some
things you can do with your home loan to improve your personal
finances. The first thing many people do is use their home
loans to consolidate other loans they have.
Home Loans are Cheap!
While this is a common method that is used to lower monthly
payments, there are also some risks involved. Home loans are
good because they can allow you to combine your credit cards
and other loans into one monthly payment that may be lower. The
interest rate may also be lowered as well. At the same time,
this may not always be the case, and some people use their home
loans for consolidation only to find that the interest rate is
higher. It is important to do your research to make sure you
bills will be lower once you've consolidated your debt.
Loan Consolidation
In addition to the money you will save with a home loan, you
will also have more income at your disposal. This money can be
saved or you may choose to invest it. Using a home loan for
debt consolidation can also improve your credit over the long
term, because your low monthly payment will make you less of a
risk to lenders. When you have a large amount of debt, your
credit could end up damaged. However, homeowners who don't
exercise discipline could find themselves in more debt. You may
also want to look at debt counseling service to learn how to
keep your debt under control.
The One and Only
Once you have used your home loan to consolidate your debt, it
may be a good idea to begin using cash as much as possible. If
the home loan is still outstanding, avoid taking out any more
loans. Another great use for home loans is home improvements.
Your house is an investment, and the more you put into it, the
more you will get back. Adding improvement to your home can
greatly increase its value, and you could earn a lot of money
if you decide to sell it one day.
Drawbacks of the Home Loan
The only problem with home improvement is making the wrong
choices. You want to spend money-improving areas that will
greatly increase the value of the home. Remodeling either the
kitchen or bathroom will bring the most value to your home. You
want to make sure the improvements you make enhance the beauty
of the home. While adding carpet and paint to the home won't
greatly increase the value, it will make the house easier to
sell if it is done properly.
However, it is important to remember that lenders who know you
are trying to sell your home are not likely to give you a home
loan. If they do, you can expect to have more costs. It is also
important to remember that if you sale the home, you will need
to make enough to cover the mortgages and other costs. Another
good use for home loans is paying for the cost of education for
your children. Like home improvements, using a home loan to pay
for the cost of education can be an investment. It can keep
your children out of debt.
Despite this, many parents will be nearing retirement when
their children head to college. Some parents may need the home
loans to deal with the effect of not having an income from a
job. The last thing that many people do with home loans is buy
things they want, such as a boat or a nice car. If you get in a
situation where you have medical bills, a home loan may also be
able to help you.
About the Author: Joe Kenny writes for the loan comparison
sites http://www.selectloans.co.uk and also
http://www.ukpersonalloanstore.co.uk
Source: http://www.isnare.com
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