As interest rates go up on first mortgage loans, I think we’ll see a return of the Equity Line of Credit. Consumers will not want to refinance a lower interest first mortgage for a higher interest first mortgage. Yet, life still happens and consumers will still want money for remodeling, college education, illness, and even the death of a loved one.
Housing prices in many markets are rebounding, which will give some people the ability to use that equity for other purposes. Most lenders will go up to 85% Loan to Value on an Equity Line of Credit, some will even go up to 90% Loan to Value. That would be the Appraised value times 85% or 90% minus the first mortgage balance. An equity line of credit is typically a second mortgage, although some people use them on a first mortgage basis.
Equity Lines of Credit are typically interest only for the first 10 years, then are fixed for the remaining 15 year period. During the interest only phase they are typically based on prime rate plus a margin.
These loans are not for everybody. You typically need a good Credit 720 score or above, and obviously you have to have Equity in your home.
For over 30 years I have been doing home loans in Grand Junction for first time home buyers, investors, veterans or refinancing current mortgages. I offer friendly, professional service. I own and manage Dependable Mortgage Co., in Grand Junction, Colorado and would consider it an honor to help you in any way that I can when it comes to financing your home. I take my job serious as I know that when purchasing or refinancing a home, it is usually the biggest transaction that people will make. Rates are still low. If you have questions, please don’t hesitate to call. The contact information is listed below on this page.
DEPENDABLE MORTGAGE CO.
Rhonda Sherman, Owner
License # 100008357 NMLS # 381084
145 Grand Avenue, Suite B
Grand Junction, CO. 81501
Office: (970) 257-1502 Cell: (970) 250-8613
Website: Dependable Mortgage Co. (apply online ‘Get Started’ 24/7)
Regulated by the Division of Real Estate
An Equal Housing Lender