125 Home Loans Tips
The 125 Home Loans is the second mortgage that allow to borrow 25% more than your home value. And the only loan allowed borrowers to exceed the value of their home.
Many homeowners have incurred additional debt from renovation, purchase furniture, paying credit card debt, student fee and etc.
How does it work? For an example, if your home value is about 100 thousand and you borrow 100 thousand from the 1st. mortgage, the 125% home equity loans lenders will offer you 25 thousand at the second mortgage.
Unfortunately not all peoples are qualified for the loan, especially for those who carried bad credit. This type of loan required a people who has good credit score and proper documents to prove the stable income.
3 facts of 125 loans
1) Home equity value - your home equity value is derived from the home appraised value and mortgage balances.
2) Credit score - the higher credit score you have, the better interest rate lenders will offering to you. The lower your credit score, the higher the interest rate.
3) Rate types - There are 2 major options available. If you financing for home improvement or short term usage, a variable rates is more suitable for the criteria. A fixed rate option will recommended for the refinancing debt (long term) and bigger amount.
There are many 125 loan lenders in the market, but most of them are credit score driven. Some of the lenders will require seasoning of the length of the time you have stayed at the home. Minimum is 3 months or longer period.
If you wish to obtain a best rate, as usual practice, seek for several lenders instead of 1 lender. Compare their terms and conditions, rates, fees charges and etc.
For more information, I suggest you to check out
125% Home Equity Loan instead of 125 Home Loans
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