dwanal asked:


I’ve been approved for a 1st mortgage at a fixed rate of 7.38 and a 2n mortgage interest only at 10.425. This loan is for an investment property. I’ve been told that the 2nd loan is Home equity line of credit. How much will my payments go up on the 2nd mortgage and should I look for another loan. Thank You.

Marilyn

Natalie Aranda asked:




You need to use your house as equity to get some extra cash. However, you don’t know whether you should take out a second mortgage or a home equity loan. What’s the difference anyway? Wouldn’t Utah home equity loans and Utah home mortgages be the same over the long run? Well, not really. Consider the differences before making your decision and realize that mortgage planning is important.

First of all, the wording is difficult to understand. But, you must understand the difference in order to make the right decision. A second mortgage is simply another lien on your property. A second mortgage is very similar to the first mortgage, just that it comes second. It is likely to be an adjustable rate or fixed rate loan just like the first mortgage.

Then there are home equity loans. These loans appeared in the 1980s as a second mortgage that was a line of credit open for the individual to “borrow” from as needed. The loans were called home equity loans and they allowed the borrower to take what was needed on an ongoing basis up to a certain limit. The difference between the two has now been discussed, but which one is the best one for you?

If you are trying to decide whether you need a second mortgage or a home equity line of credit you simply need to answer a couple of questions. First of all, what do you need the money for? If you need the money for a big repair project on the house or some other situation where you need a large sum of money in the exact moment then a second mortgage is a good option. But, if you need money over time, say to pay for college, then a home equity line of credit is the better option. You really need to determine your needs and what is available to you before making a decision. Once you have all of the information you will be ready to choose the best option for you.

Remember that when it comes to mortgage planning you can rely on a banker or someone else to guide you. But, you should be informed and educated on the options and what you are able to chose. Not to mention how it will affect you. When you have this information you will make better financial choices. So, do your research, learn the difference between the two, and then go ahead and make the best decision for you.

Lorraine

C.L. Haehl asked:




Whether you are refinancing, getting a second mortgage or home equity loan, getting a mortgage loan with poor credit history can be tough. In the eyes of the lender, having credit problems puts more emphasis on the other qualifying factors to determine whether or not you can get approved.

Here are some tips to help you get approved for a mortgage loan:

1. Consider ways to come up with a down payment – Even a 2-3% down payment can affect your ability to get approved for a mortgage loan or help you get a lower interest rate on your loan. There are many creative ways to come up with a down payment. Sometimes it can be worth saving for a few extra months or a year to come up with a down payment.

2. Lenders will be looking closely at your income and job history – With bad credit, lenders are going to want to make sure that your income is more than enough to cover all of your minimum payments. The longer you have been at your job, the better. If you are close to the one year mark for your employment, consider waiting a little longer at your job before you apply for your mortgage.

3. Lenders will want to see your most recent debt payments being made on time – Even if you have had credit problems in the past, lenders will be looking closely at your payment history over the last year or two. They will be most interested in how you make your auto, utility and credit card payments. If you are consistent with those payments now, the lender may be willing to overlook past credit problems.

4. Try using techniques to increase your credit score – There are many tips available online to help you raise your credit score. There are 16 ways to improve your score here. You can dispute online, for free, any inaccuracies that are shown on your credit report. This can begin raising your score, sometimes within 30 days or less.

Ellen