• Mortgage Tips
• Home Equity Loans: One of the joys of home ownership.
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Mortgage Tips...

Home equity is the difference between the fair market value of your home and the amount that you owe on the mortgage. It is the amount of money that you have invested in the house. For example:

Fair market value: $100,000

Outstanding Mtg: - $60,000

Home equity: $40,000 If you’re planning a major home repair, trying to reduce the interest rate on your outstanding debt, or simply looking for easy access to credit in case of emergency, a home equity loan could be the answer.

According to Ric Edelman, author of The New Rules of Money (HarperCollins), pulling equity out of your home can make a great deal of financial sense. But he warns consumers to think carefully about how they use the loan proceeds. "There are two legitimate uses for home equity loans," Edelman says. "Number one is to pay off other debt. You can take an 18% credit card debt that is not tax deductible and swap it out with an 8% home equity loan that is tax deductible. Debt consolidations is the best use for the home equity loan."

Edelman thinks that using home equity loan proceeds to make sound long-term investments makes sense as well. "In today’s economic environment you can get a home equity loan at only 7% or 8%. You can easily invest the proceeds in ways that, over the long term, generate at least that much return and probably more. And you pocket the difference. Besides long-term investments in securities, consider investing in your own home by making improvements on it. In fact, plowing loan proceeds back into your property could raise its resale value virtually dollar-for-dollar. And as a bonus, you not only get to enjoy the bigger basement, additional room, or outdoor amenities that your home equity loan can finance, but you get a tax break as well.

While investing home equity loan proceeds makes good financial sense, you should think twice before using the proceeds for purely consumption purposes. Yes, tapping home equity is usually a less expensive way to borrow money to buy a car, take a vacation, or finance

Line of Credit or Lump Sum?

There are two ways to tap the equity in your home. Many borrowers prefer the home equity line of credit, in which the homeowners use a checkbook, debit card or credit card to draw against a maximum loan amount as needed. After the credit line is established, no additional approval is required from the lending institution. If you think you might eventually need a home equity line of credit, set one up while your family finances are in good shape. Lenders are less likely to look favorably on such requests after you have lost your job or are facing a medical emergency-precisely the time you need the money.

The interest rate on home equity lines of credit can float from 1% to 3% above the prime rate. Such a relatively wide range of rates however, can make a significant difference in the attractiveness of a line of credit. Beware of "teaser" rates which escalate sharply after a few months.

The second form of home equity loan is a traditional loan which resembles a second mortgage. The borrower receives a lump sum and makes monthly payments until the loan is paid off, usually from five to fifteen years. One of the many benefits to a straight home equity loan is a fixed rate.

Invest Mortgage can also offer second mortgages to borrowers with no equity in their homes! You can borrow up to 125% of the value of your home (stated or appraised) with good credit. This type of loan is excellent when paying off large credit card balances and consumer loans.

A lot of questions come to mind when you are buying, selling, or refinancing a home. How much can I afford? Will it take long? What is my first step?

Our job is to answer your questions, let you see your range of options, and help you proceed toward your housing goals. We recognize that your needs and interests are unique and important.

Contact us when you have home-related questions. We’ll listen to you, make sure you feel comfortable with the process, and be your professional mortgage consultants!

About InvestMortgage...

We are a local company, have over 25 years of experience and we are ready to assist you with your refinancing needs.

Our programs can help anyone with A+ credit to D credit and we can get you loans up to 125% of your home’s value.

If you haven’t already taken advantage of today’s low rates, you owe it to yourself to call us today!

Invest Mortgage Inc.

101 Tattlers Trail

Irmo, SC. 29063

1-800-337-7425

(803) 732-7500

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• Remodeling Basics