Equity mortgage refers to the home loans that are given to established home owners to help them improve their borrowing capacity. They are especially favorable for people who are considering selling their property sometime in future. The loan helps the home owner to transfer some of the expenses incurred on the traditional home to a later date when the property is eventually sold off.
Equity mortgage loans allows one to borrow up to 25% of the value of the property. This value does not attract interest and neither does it attract an annual percentage rate (APR) unless a borrower is in default. The loan also does not require you to make any regular monthly payments and in addition, you can hold the loan for period of up to 25 years.
When it comes to repayment, one is required to pay for the amount that was originally borrowed, plus an amount not exceeding 40% of any increase in the value of the home or property. This is mostly as compensation for the fact that your loan is not subject to APR or interest rates. In case of a decrease in value, you are allowed to repay the amount borrowed, less 20% of the value of the decrease.
Some of the qualities that this loan lenders look for in an individual is that, they have to be at least 62 years old. They also must be the outright home owners and must not be in any mortgage debts. Eligible borrowers can apply for the loan through the Home Equity Conversion mortgage, which is a program authorized by the Housing and Community Development Act of 1987, Section 417, Public Law 100-242 (12 U.S.C. 1715z-20.
Peter Gitundu Creates Interesting And Thought Provoking Content on Finance. For More Information On How To Manage Loans, Read More Of His Articles Here EQUITY MORTGAGE If You Enjoyed This Article, Make Sure You SUBSCRIBE TO MY RSS FEED! To Receive My Most Recent Posts & Updates.
Related Posts
-
Links
