We may not be comparing real apples and oranges, but we’re coming pretty close in the home financing industry.
And if you’re at all interested in using your home’s equity to access cash, then this comparison is for you.
There are two common ways to get cash from your home—a Home Equity Line of Credit (HELOC) or a cash out refinance.In the current environment, many people want to keep the great interest rate they already have on their home loan, so they automatically choose a HELOC over a refinance. But wait—there’s a big difference that can make the benefits hard to compare at a glance. HELOCs have adjustable interest rates, whereas most home loans are fixed.
Try it out. And if you’re interested in exploring your options more, please let me know. I’ll be happy to help.
A good credit score is important for more reasons than just obtaining new credit. These days, it can factor into everything from landing a new job to getting the best deal on your insurance policies. It's more important than ever to avoid late payments on your mortgage!
A 100 point drop for one late mortgage payment? It’s true. A single 30-day-late mortgage payment can cause your score to drop by as much as a hundred points. Credit scoring algorithms vary based on many factors, and in some instances, the damage may be even greater and last for years.
The costs accumulate. At the time, a single missed payment will cost you only a late fee, but the expense really adds up on your next loan or missed opportunity. Low credit scores typically mean a higher rate and cost. Higher rates can mean hundreds or thousands of dollars of extra expense over the life of a loan.
Missed payments are usually unplanned. Usually, events beyond our control lead to late payments, such as an accident, illness, job loss or family issue. At other times, carelessness or a hectic life may result in a forgotten payment.
What can you do?
Little other than time will decrease the negative impact of a late payment, so prevention is the one sure remedy. If you don't already have a good system in place to assure timely payments and are not sure what's best, reach out anytime. We'll be happy to help set up a plan that's right for you.
Here’s a new addition for your home buying toolbox: a quick way to estimate a total monthly housing payment and the income needed to qualify.
Just bookmark this payment and qualification calculator link and make a quick visit while you’re looking at homes. I hope you’ll feel more comfortable knowing what you’ll likely pay each month and whether the loan may work for your particular situation.
Give it a try now!
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