Many of us work our entire lives to have that one dream home in the perfect place.
You don’t have to settle for less, when there are plenty of ways to get exactly what you want, with the equity you already have!
Pictured Above: The Dali Pool Area
What is a Home Equity Loan?
A home equity loan can be one of the most cost-effective ways to borrow money.
Interest rates are lower on mortgages than on almost any other type of loan right now.
Taking out a home equity loan is also known as a “second mortgage.”
This loan uses your home as collateral and lets you borrow against your existing equity!
How Much Equity is Enough?
Most lenders want you to have 15% to 20% in equity in order to pull some of the money out.
Some lenders prefer a little more equity, in order to keep your total mortgage commitments to 80% or less of your home’s value.
Income & Debt Factors
Some lenders will look at your income against your debt as well, to ensure you can afford the new loan.
Typically, for a home equity loan, lenders like to see your debt-to-income ratio at less than 43%.
Some will allow your debts to make up a larger portion, depending on outside credit factors.
Credit Factors
Your payment history and credit score will also make up a large portion of qualifying for a home equity loan.
If your score is above 620, the better your chances will be, and the lower your interest-rate will be!
All in all, it’s a small price to pay to live the life you’ve always wanted, and in the home of your dreams!
Pictured Above: The Tiki Bar in Citrus Hills