The real estate market slow down may be causing you some big problems. If you are like most home owners, you probably intended to stay in your home for a few years (average is five to seven years), then move onto a home that better fits your needs. But with a market slow down, it may be difficult to sell your home and move up. Have you ever heard of the 125 home equity loan?
One option to consider is making improvements to your home or remodeling. But what do you do if you do not have the funds to remodel? Most remodeling projects require a lot more money than the average savings account. But you still have some options.
In this situation, lots of people turn to home equity loans. But even if you do not have a lot of equity in your home, you may be able to get enough money for your remodeling project. Instead of a traditional home equity loan, you could take a 125 home equity loan, sometimes referred to as a 125% no equity loan.
Basically, this loan is available to home owners to allow and allows them to borrow up to 25% more than the worth of the home. If this loan sounds too good to be true, you should be aware that there are some restrictions to these loans and they vary from state to state.
These loans are available to home owners with excellent credit. Borrowers can take a loan up to 5,000, of which, no more than ,000 is cashed out. The home owner must use the money to improve the home. The loan can either be used as a first or second mortgage.
If the loan is a first mortgage, there are some obvious tax benefits, but you should always check with a tax consultant before taking any tax deductions. One of the downsides of this loan is that when you do sell your home, you have to repay the loan, which could exceed the purchase price of your home. But fortunately, the improvements you make to your property should allow your home to appreciate in value, especially after the real estate market rebounds in the future.
Just because the real estate market is not moving in the direction you would hoped, there is no reason why you cannot have a home you will be comfortable in. Sometimes you simply have to change your plans and get creative.
There are almost as many options for mortgages as there are homes out there. Do not be afraid to ask for more information about the 125 home equity loan, or get creative with mortgage solutions. With a little creativity, you can be in a home that is perfect for years to come.