An Equity mortgage is a mortgage based on the value of your home. Not to be confused with a HELOC (Home Equity Line of Credit) an equity mortgage will have a fixed interest rate, set term and amortization period. It can either be classed as a first mortgage or second mortgage and is usually used for major renovations or debt consolidations. Some lenders wi not require you to show income when the amount of the loan is less than 50% of the home value but you will need a fairly good credit rating. If you have a poor credit rating and have equity in your home, a two step process may be the best way to go. First a private mortgage while rebuilding your credit rating then moving into an equity mortgage at a better interest rate for the long term.
Lines of Credit
A home equity line of credit is a re-advance able loan that is set up for either interest only payments or a minimum payment. If you are going to carry a balance on your credit cards or have a personal loan this type of mortgage will save you thousands of dollars over the life of the mortgage. depending on your needs, you can go as high as 95% of the value of your home subject to your credit rating, income and other debts. A Home Equity Line of Credit is one of the cheapest and quickest access to money and should be part of a homeowners financial emergency and every day plan.
Almost every lender offers a HELOC and some go as far as to offer an all-in-one mortgage product where you have a fixed mortgage, line of credit and credit card extending from one   ; mortgage loan.
If you have any questions about HELOC's or Equity mortgages please use the form below.