Michigan Mortgage Home Equity LoanMichigan Home Equity Loan
Home Equity Loans are types of loans based on the value minus liens on your home. Interest payments on a second mortgage may be tax
deductible. They come in two varieties: the traditional second trust deed
(mortgage) and a line of credit, a great way to payoff debts. A way to pay bills over a long
period of time. It's much better than a second mortgage, lower interest
rate, interest only loan, and is open as long as you want. It's a great way to
access your money. Another great thing is to avoid Private Mortgage Insurance or PMI. The advantages of a line of credit include:
- Low interest rates because (a) the loan is secured by a home, and (b) it usually bears a variable rates.
- No Closing cost fees for this type of mortgage (appraisal, title work and
closing) with a first mortgage.
- No processing fees. There is no need to go through an application and incur fees each time money is borrowed.
- Convenience. A check may be written only when money is needed. Interest is charged only on the amount borrowed.
Pitfalls of the other equity loans or second mortgage include: See Mortgage Programs - High points. Points imposed on a
second mortgage or (HELOC) is based on the amount of the credit line, not on the amount actually borrowed. Many HELOC's have no caps on interest rates.
- Long payback period. It is convenient to have to pay a small minimum amount each month, but stretching out the mortgage payback period usually means higher interest rates.
- High balloon payment. Some
businesses require a large balloon payment of the principal at the end of the loan period.
- Risk of home loss. Unlike other
businesses, there is a risk of losing a house.
It may be difficult to sell your house fast enough and at a fair market value to be able to meet the balloon.
- Frivolous spending habit. One may get into the habit of spending on unnecessary things.
HELOC is commonly used for? -
Debt Consolidation to Lower Payments
- Pay for improvements
- Pay for major purchases
- Pay for education costs
- Investments
- Operating capital for business
Line of credit interest may be tax-deductible (Consult your tax advisor) and it can even lower your monthly debt payments when you use it for debt consolidation. Other Exclusive Benefits: - Low introductory rate
- Revolving line of credit accessible by simply writing a check or using the Lender Platinum MasterCard®
- 20-year term to meet your needs both now and in the future
- Interest-only payments based on your outstanding balance—you only make payments on the amount used.
- Fixed Rate Lock Option, which allows you to lock in a fixed rate, fixed term and fixed payment on a portion of your line of credit
- 24-hour online access, automatic bill payment and more.
Your HELOC Loan is a interest
only loan. If you have an
equity loan for $50,000 and your interest rate is 5.50% (Prime Rate) for 20
years. ($50,000 x .0550 / 12 = $229.17
- $50,000 (Loan Amount)
- 5.50% (.0550) (mortgage rate)
- 12 Months (number of payments for the year)
- = $229.17 (Interest only monthly payment amount)
By submitting this information request form, your information will be sent to our participating lenders. One or more of our participating lenders
will contact you by email or telephone even if you are currently on the do not call list.
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