| Question |
 |
Few questions--- First, can you explain what "equity" means?
Equity as it pertains to my home. Also, a friend of mine borrowed money from his mortgage loan to pay for a new pool at his house and to do a few renovations. How does that process work, and how long do you have to pay on your Homeowners loan before you get this option? I have only paid on my home for about 7 months. Thanks
|
| By
FromTheTop |
Posted on
10/14/06 Total Answers
5 |
|
| Answers- |
| IT means a process in which money are distributed |
| Answer by :
JONES On Date
2006-10-14 10:30:05 |
|
| Equity is the difference between how much you owe on your house and how much it is worth. If you have only had it 7 months ,unless you got the buy of the century you probably won't qualify for a home equity loan. You can perhaps refinance, however this is not the best market for that. |
| Answer by :
Stacey B On Date
2006-10-14 10:33:10 |
|
| "Equity" is the owners' interest in its property as opposed to the mortgage lender's interest. Ex: A house with value of $100,000 burdened by an $80,000 mortgage. The mortgage lender's interest is $80,000; the owner's equity is $20,000.00.
You friend may have taken an additional advance on his mortgage; or obtained a 2d mortgage from another lender; or obtained an "equity line" from a third party lender. After only 7 months there's probably little difference in your mortgage balance so it is unlikely your lender will advance aditional funds. Whether you can get a 2d or an equity line depends on your equity & your credit rating. |
| Answer by :
MLaw On Date
2006-10-14 10:34:08 |
|
| Simply put, equity in a home would be the real, current cash value minus mortgage obligations against it. Let's say (for the sake of simplicity) you paid 100K for a home, put 20% down, so you financed 80K of it.
If you could sell it today for 130K.. your equity would be 50K.. |
| Answer by :
skonch01 On Date
2006-10-14 10:34:38 |
|
| The equity answers are for the most part right on, it's just the difference between what you owe and what it appraises for.
Your friend took out a second lien mortgage, and there are two main types, a fixed or home equity line of credit (heloc). The home equity line is like a credit card, it's a "revolving" line of credit in which you can take cash out via a checkbook or debit card, and pay the balance back down if you choose. The payment is interest-only like a credit card and anything you pay towards the principal comes directly off the balance and your minimum payment drops accordingly. The drawback to this type is that the interest rate "floats" and is subject to WSJ Prime Rate. The fixed 2nd mortgages are more like an auto loan. It's called an "installment" loan. You take a certain amount out in a lump sum, and make the same payment every month principal and interest until it is paid off, just like your typical first mortgage. There are 10, 15, 20, 25 and 30 year fixed loans. The typical minimum loan amount is $10,000. |
| Answer by :
Justin On Date
2006-10-14 12:39:15 |
|
