Home Equity Loans and HELOCs Available In Gresham

Home Equity Loans and HELOCs Available In Gresham

Stone_Bridge_Mortgage_Finding The Right Home For Your Budget

 

Gresham Homeowners Have Two Options for a Second Mortgage – Home Equity Loans and HELOCs

Home equity loans and HELOCs are two types of loans that allow you to borrow against your home’s equity. Both of these loan options can be useful tools to Gresham homeowners. For example, if you need money for remodeling projects or to consolidate high-interest debt, then taking out a second mortgage may be a good choice for you.

Why Are Home Equity Loans and HELOCs Good Choices for Gresham Homeowners?

Both a home equity loan and a HELOC have interest rates that are typically much lower than other borrowing options available to Gresham homeowners. This makes taking a second mortgage out preferable to the alternative of taking out a personal loan or credit card. Also, because both of these loan types use your home as collateral, they may be easier to qualify for. Also, you ultimately get to choose how you use the money you get from these types of loans.

The Differences Between Home Equity Loans and HELOCs

Home equity loans and HELOCs each have their benefits and drawbacks. Gresham homeowners looking to take out a second mortgage must figure out which option works best for them.

Home Equity Loans

With a home equity loan, you receive the borrowed funds in a single lump sum. How much you are able to take out is limited by your loan-to-ratio value. This calculation takes into account your home value minus your existing mortgage and limits the loan to about 80% to 90% of that balance for those that qualify. Home equity loans are the more predictable of the two second mortgage options because they come with a fixed interest rate, fixed repayment term, and therefore, a fixed monthly payment. One thing potential Gresham borrowers will want to ask up front is if the lender charges a prepayment penalty. This way, if you want to pay the loan ahead of schedule you can know what to expect. Compare options to determine what is best for you.

HELOCs

HELOCs, or Home Equity Lines of Credit, is a line of credit you can borrow against when you need the money. As such, these loans are more like a credit card than a personal loan. In the end, you only pay back the amount you borrow. HELOCs also limit how much you can borrow, and usually allow for approximately 85% of your home’s value. Fees may be added onto this later. Interest rates can be variable based on an index, although some lenders allow customers to convert these to fixed rates. HELOCs have fixed borrowing and repayment periods – usually 10 years for borrowing and 20 years for repayment. You only pay back what you borrow in the borrowing period. Since monthly payments depend on how much you borrow and your interest rate, HELOCs are less predictable than home equity loans. It can be hard to tell what your monthly payment will be and it could even fluctuate over time.

Gresham homeowners who need extra cash may find that taking out a separate mortgage is a better option than other types of loans. However, careful consideration is the key when it comes to considering any type of loan – especially one that uses your home as collateral. For those in Gresham looking for advice on home equity loans and HELOCs, come down to Stonebridge Mortgage Group for sound professional advice.

Stonebridge Mortgage Group is Proud to Serve Gresham

For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!

 

 

Call us today at 503.661.5580

 

Questions to Ask Your Mortgage Lender

Questions to Ask Your Mortgage Lender

Stone Bridge Mortgage Group_Questions to Ask Your Mortgage Lender

When you’re buying a home for the first time, it can be easy to get overwhelmed by the entire process. The best thing you can do for yourself as a first time home buyer is to stay informed with the help of a mortgage lender. Don’t go blindly into a huge commitment like securing a home mortgage. Your mortgage lender can keep you in the know on all the important details throughout the loan process. Here are some questions you can ask your mortgage lender before finalizing any deals on a new home.

What type of loans do you offer? What are the qualifying guidelines for each?

There are many different types of mortgages, such as fixed-rate, adjustable rate, Federal Housing Administration, Veteran’s Association, and many more. You need to know what loan your lender can offer you. Have your lender take the time to explain each one to you, listing the benefits and shortfalls of each. Make sure your lender isn’t just pushing their own agenda. They should only recommend specific loans after learning about your particular needs and qualifications.

What is the interest rate and the annual percentage rate (APR) for the loan?

You interest rate will be based on both the size of the loan and your credit score, and accrues over the life of the loan. The APR includes both the interest rate and all other lender fees, divided by the loan’s term. Over the course of a 15-30 years span (a common mortgage span), your interest can add up to a considerable price. You need to know what your future holds, so ask your lender about this. If the interest rate is adjustable, ask how long the rate will remain fixed, and about the maximum annual adjustment, highest rate (cap), index and margin.

What’s the monthly payment going to be?

Knowing your monthly expenses is crucial to planning a budget after your home purchase. Make sure to have your lender include taxes and insurance in their calculations. Your monthly payment shouldn’t be so large that it is burdensome to keep up with or so that you can’t budget for things like unexpected expenses or a retirement fund.

Is there a prepayment penalty?

If you expect your economic situation to change in the future or want to save up to make some extra mortgage payments, it is important to make sure your lender won’t penalize you for paying off the loan early. Some lenders charge an additional processing fee for each overpayment, while others ask for six months of unearned interest. Others only charge a penalty if you pay off your loan before the first two to five years. Verify if your monthly payments will adjust in line with any additional payments you make and if the penalty applies if you decide to refinance later on.

Don’t be afraid to ask questions or request documentation from your mortgage lender. A good lender will take the initiative in communicating key concerns with you and keep you informed throughout the loan process. Being informed can help take some of the pressure off of making a big decision which then allows you to make the best decision for your future.

If you have more questions about the particulars of home buying, call on Stonebridge Mortgage Group to help guide you through each step of the home buying process. We help you get pre-approved for a mortgage. We can help with your real estate loans and mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and we are located in Gresham, Oregon.

 

Call 503.661.5580 now to get started on buying your new home!

 

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