subject: Exploring Portland Mortgage Loan Options [print this page] Are you buying a home? Perhaps you are thinking about refinancing your current home. There are a lot of considerations with a Portland mortgage loan. Here are some to look at.
Two major choices
You may be considering a home refinance. Did you know that you might be able to get a second mortgage or equity loan? An equity loan has some advantages over a refinance. This depends on your financial situation. In some cases, you are better off with a home refinance.
Refinancing your property
A property refinance means that your old loan will be paid off. You start a new loan with a different interest rate and monthly payment. In many cases, you may be able to borrow eighty percent of your home value. However, if you check with several lenders, you may be able to borrow more. If you borrow more than eighty percent of the appraised value, you might need PMI. This is also known as private mortgage insurance. A loan for more than eighty percent is considered more risky. This insures the lender that they will get the money, in case of default. It will also raise your house payment.
A big advantage of a refinance is that you only have one payment. If there is money left over, it is yours to keep. However, this type of loan is usually a thirty year loan. It may take you a long time to pay down the principle. It is like starting all over again with your house payments. Except this time you are borrowing the equity in your property.
Home equity loans
These are also known as home equity loans. They might also be called home improvement loans. You can borrow money with your home equity as the security. Suppose your property is worth $150,000. Maybe you still owe $100,000 on your home loan. This gives you $50,000 to borrow against. An advantage of these types of loans is, you may sometimes borrow the entire $50,000.
There is another benefit to a home equity loan. They are for much shorter time periods. You may be able to get terms as short as four years. This frees up your home equity for future ventures. It will give you two separate house payments. This can sometimes be a financial burden.
Conclusion
Are you checking out the possibilities with Portland mortgage? Maybe you cannot decide between a home equity loan and a home refinance. A home equity loan will give you the chance to pay it off much sooner. As long as you can afford the extra house payment, this way might be best. If not, there are advantages to a refinance.
by: John Longfield
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