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Report
#1
No Income Verification Home Equity Loan
A no income verification home equity loan is
a second mortgage loan that does not require you
to provide income documentation to qualify for
the loan. This type of loan is great for homeowners
who need a home equity loan but have hard to document
income.
The majority of borrowers with hard to document
income are either self-employed or commission
based employees. Consumers who fall under these
categories may have high income but have a lot
of business related deductions that they write
off on their taxes. This is good on the one hand
as it reduces the taxable income and thus the
amount of taxes owed, however, when it comes to
getting a home loan it can hurt as most lenders
use the average of your last 2 years taxable net
income (the amount left after all of your deductions)
to determine your income figure for qualifying
purposes. This may cause you to have a debt to
income ratio problem if you have a high debt load
and thus keep you from qualifying for the loan.
With a no income verification home equity loan,
however, your gross income can be used for qualifying
purposes as opposed to the net income.
In order to qualify for a no income verification
home equity loan you will, in most cases, need
good credit and a high credit score. Expect to
pay a higher rate for this type of loan as opposed
to a traditional loan in which you have to document
your income. Also, even though a no income verification
loan does not require you to document your income,
some lenders may require that you have a certain
dollar value of assets on hand which must be verified.
Not all lenders have this requirement though -
some lenders offer a program called NINA which
stands for "no income no assets" meaning
you do not have to document either. Loan guidelines
and rates vary from lender to lender so it is
a good idea to shop around to increase your chances
of getting the best deal available to you.
Report
# 2
What Is A Second Mortgage?
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A second mortgage is a loan that is secured by
the equity in your home. When you obtain a second
mortgage loan the lender will place a lien on
your house. This lien will be recorded in 2nd
position after your primary or 1st mortgage lender's
lien, hence the term second mortgage.
A second mortgage is also sometimes referred
to as a home equity loan. There is no difference
between a home equity loan and a second mortgage.
These are just two different terms for the same
subject.
A second mortgage can either be a fixed-rate
loan or an adjustable-rate credit line. Interest
rates and loan program terms will vary from lender
to lender so it is important to shop around and
compare before committing to any one offer.
Loan proceeds from a second mortgage loan can
be used for just about anything. Many consumers
take out 2nd mortgage loans to consolidate debt,
do home improvements or pay for their kids college
education. Whatever you decide to do with your
loan proceeds it is important to remember that
if you default on your payment you can lose your
home so you will want to make sure that you are
taking the loan out for a worthwhile purpose.
Another plus of a second mortgage loan is that
the interest you pay back on the loan may be tax
deductible. Consult your tax advisor regarding
your personal situation but in most cases the
interest is 100% fully deductible as long as the
combined loan to value of your 1st and 2nd mortgage
do not exceed the value of your home.
Report
# 3
125% Equity Home Loans |
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If
you are a homeowner in need of a home equity
loan but you have not yet built up any equity
in your home, don't despair. A 125 percent
equity home loan may be the answer.
A
125 percent equity home loan is a second
mortgage loan that allows you to borrow
up to 25% more than the value of your home.
For example, if your home is worth $100,000
and you owe $100,000 on the mortgage, this
loan program would allow you to still borrow
up to $25,000.
The
125 percent equity home loan is offered
by various online lenders. Each lender has
their own qualification and loan term guidelines
but generally this is a credit score driven
loan program. Credit score driven means
that you have to have a certain credit score
to qualify for the loan. In addition, your
credit score usually determines the maximum
loan amount you may qualify for and the
maximum cash in hand you may receive. Also,
some 125 percent equity home loan lenders
may require seasoning on the length of time
you have lived in your home. Three months
is normally the minimum.
When
it comes to a property appraisal, most 125
percent home equity loan lenders do not
require you to obtain one. They generally
will use the purchase price of your home
as the value if you have lived in your residence
for 12 months or less. If you have lived
in your home over 12 months, a recent tax
assessment, simple drive-by appraisal, or
automated value model (avm) can be used.
An avm is a computer generated assessment
of your home's value which is based on recent
home sales of comparable houses in your
neighborhood.
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By Levetta Rivera |
