Spending or Saving your Home Equity – Part 2

In Part 1 ways to accumulate home equity were discussed, both incidental and deliberate; and in Part 2 how to access it is investigated.

Basically home equity is the difference between what is owed on your home and the market value of it. Once you have established that you have accrued some home equity, you need to get the banker who holds your loan to agree with you that this is the case!

In order to convince the lender of this, you should take along your house tax bill and an estimate from a realtor, or proof that your house value has increased by showing evidence of the price of other similar houses in your area.

It is always advisable to go to the original mortgage lender on the property to start with. They will have to know anyway, as the loan will be lodged against the deeds that they are holding.

If your original banker declines, or if you think that you can do better than their offer, then you can shop around. Institutions that might be interested in offering you an equity loan include credit unions, private lenders, banks and of course, mortgage brokers.

It is usual to have a variable rate on an equity loan, and this will fluctuate with the bank rate. Most equity loans demand a higher rate of interest than your first loan will be. The interest on this loan will be tax deductible.

Equity income is usually offered in a choice of two ways. One of these ways is similar to a line of credit; that is you pay interest only on the money that you are using. You can withdraw and repay money as you wish.

The other way to access equity cash is to request a conventional type of mortgage. In the same way that your original loan worked, you are given the proceeds in a single lump sum and you pay interest on the entire sum right from the time you receive the cash.

It is always easier to get an equity loan if the money is to be used for improvements to the home i.e. a new kitchen or roof. This is because in a way, the bank is lending you money to improve their own asset!

Written on behalf of top Jacksonville REALTOR

18 months before joining the Tycoon Mastermind Alliance mentoring program, Glenn went through a long and painful business break up that left him with a debt of £2k per month for EIGHT years. He joined us with the initial goal of acquiring large properties let to a number of individuals to create a passive income of £2k per month to cover his debt payments. We worked with Glenn to help him form a successful property investment strategy and bring back focus into his life. We then showed him WHAT to do on a daily basis and HOW to do it to get him to his goals – the results speak for themselves… Within just 6 months, Glenn purchased 5 properties with £150000 of equity + £2000 per month cashflow. He then started his own letting agency which started generating £2k per month in revenue within just 3 months of start up. In total that’s £4000 per month in cashflow in less than 10 months and he’s only just started. The video reveals his achievements in more detail. Glenn is an inspirational property investor who has shown that no matter where you are right now or how much debt you have YOU CAN make it in property! You can watch many more more inspirational videos and download essays from successful property investors from this link: www.property-system.com
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