Home Equity and Refinancing

Do you loose value in the house when you borrow from the equity?


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2012-06-14 00:28:53
2012-06-14 00:28:53

You misspelled the word "lose." "Loose" is the opposite of "tight."


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Equity is value in an item over and above what is owed. If you have a $250000 home and owe $250000 then you have no equity to borrow. If you owe $100000 then you have $150000 equity that you may be able to borrow against.

A home equity loan allows you to borrow money on a mortgage loan. Though this can be beneficial if your home increases in value over the years, it may also be a risk if your home would decrease in value.

It's like if you needed $5000 to buy a car, and you borrowed $3000 from your father and $2000 from your uncle. The difference between what your home is worth and the total principle you still owe is called equity. As you continue to make payments, and the value of your house appreciates, your equity grows. That equity can be used as collateral; you can borrow against it.

Your equity in your house is the difference between what the house is worth, the fair market value, and how much you owe on it.

Knowing your home equity status is very important. It lets you know how much of a net value you have accumulated in your home. This can be usefull if you need to borrow against that equity or to let you know how your home value is compared to others in your general area.

Absolutely! Home equity loans enable homeowners to get cash out of the equity in their home. As Homeowners pay down their mortgage, they build equity; equity is also built as a home’s value increases. You can borrow against your equity in your home. To check out more about home equity loans visit LendingTree.

Deduct your mortgage balance(s) from the appraised value of the house. The remainder will be your equity.

This information can be found at any bank in the UK such as Barclays or HSBC. Their website have a lot of information on how to borrow money against the value or 'equity' in your home.

One might want to look into equity release plans if they are short of cash and want to release equity from their home. It is a way to borrow money against the value on one's home.

Home equity is the value of a homeowner's property minus all the money they owe on that property (as mortgage or liens). The benefit of home equity is that a person can borrow against the equity in their home at better interest rates and with better tax advantages then other types of loans.

Equity release is re-mortgage plan that makes it possible to release equity on a mortgaged property. But, as soon as the equity amount is paid, you have to clear all the outstanding mortgages on your house. There are some equity release providers who deduct the outstanding mortgages from the value of your house to repay the loan.

A home equity loan is a loan that homeowners can get based on the equity that they have in their homes. This amount is based on the value of the house and how much they have left to pay on the home loan.

Equity is the value of something you own, like a house, or car, minnus what you owe on it. For example, if you bought a house for 100,000 dollars, and after five years you owe 85,000 dollars on it, and the house is worth 110,000 dollars, then your home equity would be 25,000 dollars.

Equity is the proportion of those assets you own, compared to the debt on those assets. An example would be a house. A house is an asset. The equity is the amount of the mortgage that is paid off plus any appreciation the value of the house. Same with a company. Its the difference between what you own and the debt or liabilities. Assets minus liabilities equals equity. You have equity in assets.

Equity release, in mortgage language, refers to the ability of an individual to obtain a sum of money relative to the value of one's house while retaining the house.

The total value of the house minus the outstanding amount of the loan is referred to as "home equity".

That is the correct spelling of "equity" (owned value).

If one has excellent credit they may be eligible for a mortgage that allows them to borrow up to 25% more than the value of the home. So a home worth $100,000 would allow the loan holder to borrow up to $125,000.

Equity can only be used as a down payment in limited cases. Close relatives are able to "gift" equity in a purchase, thus eliminating the need for the buyer to bring cash. E.g. A Mother can sell her son a house worth $100k for $80k buy having a purchase price of $100k with a gift of equity of $20K. This in effect is a down payment. Without doing this it would essentially lower the market value of the house to $80K. The appraised value or market value of a house is its purchase price. The argument is that if it was worth anymore it would have sold for that price. So in most cases there can't be equity in the house when purchased because its value is what you paid for it. A second example of where equity can be used to "purchase" a house is with a Land Contract. Technically the house is purchased at the signing of the land contract, however no loan is put in the name of the buyer. After a year or more if the house appraises for more than the agreed land contract price. When the buyer takes out a loan on the property. The "equity" in the property belongs to him and in effect is his down payment.

Equity release is when you own and continue to use an item (like owning and living in a house) that possess "capital value." At the same time, you are using/acquiring a large sum of money/income that is worth the value of that item.

When you finance (or refinance) using your house as collateral (aka security) the lender is using the available value of your house to get back the loan(s) if you default. If this happens it will cost the lender money (thousands or even tens of thousands) for the process of getting it back. For this reason a prudent lender will only lend you a percentage of the current sale value of the house. If you already have a mortgage, the difference between your property's value and what you owe on it is your equity in the property, and that is the value on which they will lend. You said in your question that the value and the amount owed are the same; this means that your equity is zero, so you would not expect to get an equity line as well as rewriting the original loan.

In addition to home equity loans, it is now possible to obtain home equity lines of credit that allow you to borrow only the amount you need at any given time, even though you have access to an amount similar to that of a home equity loan. A home equity line of credit is similar to a credit card in terms of how it is used, except that the credit limit is backed by and based upon the equity value of your home. It is even possible to apply for a home equity line of credit from online lenders.

A lifetime mortgage allows property owners with equity in their homes to borrow a certain percent of that property's value as a lump sum followed up by the option of flexible cash withdrawals, which in effect releases their equity at the time of the loan and in the future as well.

yes it is. it is under the shareholders' equity

In Texas you can only borrow up to 80% of the appraised value of your home in a home equity loan. The Texas Constitution states that you must wait 1 year before you can refinance a home loan.

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