Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of http://www.explainingmortgages.com/, a mortgage resource site devoted to making mortgage terms and products easy to understand.
Now that you have been in your home for a few years and you have established some equity, you may be considering doing some home improvement with a second mortgage.
Home improvement comes in many forms. Such as a new kitchen, bathroom, roof, siding, etc.
You can acquire a home improvement loan or second mortgage through one of three ways. Refinancing with cash out, a home equity loan, or a home equity line of credit.
My suggestion to you would be, a home equity line of credit. (HECL)
The HECL is a very convenient loan for a home owner because it is not mandatory that you use the funds right away. And when you do decide to use the money, you only use the amount you need.
Lets suppose you have a home equity line of credit for $25,000.00. The lender will give this money to you as a line for you to use, only when you choose to do so. The line also comes with a check book so you can write checks at your convenience.
A refinance with cash out, or a standard home equity loan is given to you in the form of a lump sum, and you begin paying the interest and principal immediately.
On the HECL you only pay interest and principal when you use the money, and only on the amount you use.
So lets suppose you hire a contractor to put a new bathroom in your house for fifteen thousand dollars. Upon completion of the project, you would than write a check from your HECL check book, it’s that simple.
At this time, your monthly payments would begin to kick in.
Most HECL’s are amortized over twenty years, and the payment is interest only for the first ten. So make sure you are aware of the payment schedule before you close.
Home improvement is a great step to take with your home. It not only adds value to your house, but it also improves the quality of your life. And the interest is tax deductible.
As always, continue to educate yourself, and make sure you shop around for the best deal.
- Related Videos
- Related Articles
- Ask / Related Q&A
- Consideration in Finding a Good Real Estate Mortgage
- Real estate mortgage leads made simple and easy - just for you!
- Real Effects of Real Estate Mortgage Default Revealed
- Real Estate Mortgage
- Sba Loan For Business Finance And Commercial Real Estate Mortgage
- Real Estate Mortgage Options
- Real Estate Mortgage Terms
- Business Finance and Commercial Real Estate Mortgage Loan Choices
Mortgage Refinance: Good Reasons and Bad Habits
By: MPetrone | 06/12/2009Mortgage refinance can be a costly, disastrous decision if it is done incorrectly. However, there are many benefits that can be had. Here are some good reasons people refinance their homes, and some bad habits that some homeowners have when they are refinancing.
For Florida homebuyers the FHA home loan just makes good sense
By: FHA home loan Lender | 06/12/2009For Florida first time home buyers and other borrowers, the FHA home loans can have key advantages
Take the proper Steps to Get Your FHA Mortgage today
By: FHA home loan Lender | 06/12/2009Purchasing a Florida home is one of life's major landmarks and for some, it is even a dream come true. At FHAmortgageFHAloan.com we understand the importance of this decision and it is our goal to make your acquisition into home ownership memorable. Regardless of whether this is your first Florida home or your third Florida home purchase we will do our best to ensure that getting you into your new Florida home is a pleasant and memorable experience.
FHA mortgage, FHA Loans for buying a Florida home
By: FHA home loan Lender | 06/12/2009FHA Mortgage Loans for Buying a Florida Home or FHA Mortgage Refinances are Fast and Easy with FHAmortgageFHAloan.com. FHA home loans allow first time Florida home buyers and current Florida home owners buy a home with less than 3.5% down or FHA home mortgage refinance up to 96.5% of the homes value.
FHA home loan program is a FHA mortgage loan designed to assist every Florida homebuyer
By: FHA home loan Lender | 05/12/2009FHA home loan program is a FHA mortgage loan designed to assist every Florida homebuyer. FHA Home loans down to a 530 FICO.
Easily Get a Mortgage Refinance or Modification with Bank of America
By: MPetrone | 05/12/2009Bank of America is now able to offer mortgage refinancing and modification to homeowners in all sorts of bad situations. This is all because of over $75 billion in funding from President Obamas stimulus program. With this program and Bank of America, a homeowner will be able to easily lower their monthly payments, change the terms and conditions of their loan, or get cash back from the equity that has built up on your home.
Don’t Take a Mortgage Interest Rate Rise Without a Fight
By: David Nalin | 05/12/2009More than likely if you have a Standard Variable Rate Mortgage you face at least a $50 monthly repayment increase. Whenever the Reserve Bank opts for an increase in the official Cash Rate, you will need to, more than likely, look for additional similar increases in the ensuing months.
5 Bankruptcy Questions To Ask Your Attorney Before Filing
By: junior will | 04/12/2009If you think that being bankrupt is the worst thing that could happen to you than think again! Yes you are right…Worst is yet to come, but of course you can control and eliminate that worst scenario by simply making correct decisions! Hiring a wrong attorney for filing your bankruptcy can be like a nightmare coming true!
Insurance Leads in Real Time
By: Jay Conners | 23/05/2008 | SalesFor all insurance agents that follow up on leads, it goes without saying that timing is everything.
Business Insurance Leads, What to Look for
By: Jay Conners | 16/05/2008 | SalesFor starters. Where are the leads coming from? You want to make absolutely sure that the Insurance lead provider that you are considering is obtaining their business insurance leads on their own through lead generation web sites that they own and operate and can deliver them to you fresh.
Business Insurance Leads, Building Relationships
By: Jay Conners | 12/05/2008 | SalesIf you are an insurance agent that is looking for insurance leads, more than likely you are looking for policies in the area of auto, home owners, or life insurance. It makes the most sense because this is where the higher commission is.
Credit Repair Leads, Credit Repair Business
By: Jay Conners | 26/02/2008 | SalesIf you own or are thinking about starting a credit repair business, one thing you will no doubt be needing is credit repair leads.
Using Business and Greeting Cards Effectively
By: Jay Conners | 08/10/2007 | SalesBusiness cards and greeting cards almost go hand in hand when being used for marketing and business purposes.
Sell Yourself, as Well as your Product
By: Jay Conners | 04/10/2007 | SalesWhen selling a product to a consumer, one of the things we tend to overlook, is that it is as equally important to sell ourselves.
Six Simple Steps for Getting More Mortgage Applications
By: Jay Conners | 28/09/2007 | SalesWhen I first started out as a loan officer, one of the things I found to be the toughest, was taking an application over the phone. I just didn’t seem to have the skills, nor did I have a plan.
Second Mortgage for Home Improvement
By: Jay Conners | 27/09/2007 | MortgageNow that you have been in your home for a few years and you have established some equity, you may be considering doing some home improvement with a second mortgage.