Attention Homeowners! Conditions for second mortgages have changed...
Rich Hirsch, a mortgage banker has been a tremendous wealth of information to me every step of the way through this credit crunch. I wanted to share his latest regarding Home Equity Line Of Credit :
Conditions for 2nd mortgages have changed.
Conditions for 2nd mortgages have changed.
1) 2nd mortgage lenders are re-evaluating loans by reviewing your home value.
2) If a bank re-values lower, they can freeze your 2nd mortgage (aka equity line).
3) You DO NOT have to pay it back. It is simply frozen and can not be further utilized/drawn up.
2) If a bank re-values lower, they can freeze your 2nd mortgage (aka equity line).
3) You DO NOT have to pay it back. It is simply frozen and can not be further utilized/drawn up.
a. If you’ve drawn 300k on a 500k line then that’s it—no more allowed.
b. If you’ve a 500k line with NOTHING drawn a bank may freeze the ENTIRE line. Nothing allowed.
If you have a line of credit and it is NOT in use.
1) Call your lender. Confirm it is available.
2) Consult your financial planner. Prime is at 4.5% In advance of a potential line freeze, drawing some or all of the line may be useful—i.e.: if college expenses are near or a retirement strategy or another large cash event is close.
a. Be aware the prime rate changes. If you can not repay the cost of debt or are scared of fluctuating rated . . . the above is NOT the plan for you.
3) Call Me. We might refinance your 1st mortgage loan. We will close the 2nd, but give you cash out from the 1st. We can offer fixed rates—no worries about fluctuations.
4) We can work in conjunction with your financial planner to look at either option.
1) Call your lender. Confirm it is available.
2) Consult your financial planner. Prime is at 4.5% In advance of a potential line freeze, drawing some or all of the line may be useful—i.e.: if college expenses are near or a retirement strategy or another large cash event is close.
a. Be aware the prime rate changes. If you can not repay the cost of debt or are scared of fluctuating rated . . . the above is NOT the plan for you.
3) Call Me. We might refinance your 1st mortgage loan. We will close the 2nd, but give you cash out from the 1st. We can offer fixed rates—no worries about fluctuations.
4) We can work in conjunction with your financial planner to look at either option.
If your line is FROZEN:
1) You can refute the bank assessed value of your New Jersey home.
2) I suggest you contact me. I know the approved appraisers for many banks. I can have a local independent appraiser asses the value. If proved higher your line can be made available.
a. If not, we can evaluate your needs and determine if a refinance is an option.
3) I’m here to help you work with the equity in your home.
It is critical to stay informed. Call Rich for accurate answers about 1st or 2nd loans.
Rich Hirsch, Mortgage Banker -- Office: 908-410-9066
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