The second mortgagee can foreclose and take possession of your property subject to the first mortgage.
If you have a first mortgage and a home equity mortgage, the home equity mortgage is a second mortgage. If the home equity mortgage is not paid, the lender can foreclose and take possession of the property subject to the first mortgage. The home equity lender can pay off the first mortgage and keep any excess proceeds from a sale.
Your mortgage company will want its loan in first place, because they want to be the first to be paid in case of default. If you get a HELOC on a home that is paid off, then it is in first place. Some states, like Texas, also restrict the loan to value on any home equity loan- currently to 80%.
Yes. A HELOC, or home equity line of credit, is also called a second mortgage (it can be a third or fourth or more though). The HELOC is a line of credit that is backed by your home. If you default on your HELOC payment, you are defaulting on a mortgage and you lose your house when you default on it. The difference between the first mortgage and the HELOC will really only matter to the banker who takes your home. The HELOC gets paid after the first mortgage is paid, so HELOCs are therefore riskier loans and generally come with higher interest rates. Example: your home cost $100 and you put $20 down. You now have $20 worth of equity in your home. You borrow $20 against that $20 in equity, so you now owe the full $100 again ($80 for the first mortgage, $20 for second/HELOC). If you default on either loan, the bank takes your home and will sell it to cover the loans. The first mortgage gets paid from the sale and anything left over goes to the second/HELOC.
When a person or family buys a home with a mortgage, it is registered with the county or city registry as the first mortgage. The first mortgage is paid off first in whatever case. A second mortgage on the other hand is a secured home equity loan against the same property. If you default on your mortgage payments the lender has to wait after the till the first mortgage is paid. For this reason the second mortgage rates may be higher. Second mortgages are usually smaller loans.
Yes. Your mortgage company may hold your first (or primary) mortgage as well as a second which may be represented as a home equity loan or a home equity line of credit.
If you have a first mortgage and a home equity mortgage, the home equity mortgage is a second mortgage. If the home equity mortgage is not paid, the lender can foreclose and take possession of the property subject to the first mortgage. The home equity lender can pay off the first mortgage and keep any excess proceeds from a sale.
The line of credit is no longer usable and the bank that gave you the line of equity will be asking you to pay the balance. The mortgage holder will also be asking for the deficiency after the foreclosure auction. Alternatively, the banks may send you a 1099 early next year so you will owe taxes on the "forgiven" balance. Get a good bankruptcy lawyer. The law may change in this area when Congress comes back into session.
Your mortgage company will want its loan in first place, because they want to be the first to be paid in case of default. If you get a HELOC on a home that is paid off, then it is in first place. Some states, like Texas, also restrict the loan to value on any home equity loan- currently to 80%.
Yes. A HELOC, or home equity line of credit, is also called a second mortgage (it can be a third or fourth or more though). The HELOC is a line of credit that is backed by your home. If you default on your HELOC payment, you are defaulting on a mortgage and you lose your house when you default on it. The difference between the first mortgage and the HELOC will really only matter to the banker who takes your home. The HELOC gets paid after the first mortgage is paid, so HELOCs are therefore riskier loans and generally come with higher interest rates. Example: your home cost $100 and you put $20 down. You now have $20 worth of equity in your home. You borrow $20 against that $20 in equity, so you now owe the full $100 again ($80 for the first mortgage, $20 for second/HELOC). If you default on either loan, the bank takes your home and will sell it to cover the loans. The first mortgage gets paid from the sale and anything left over goes to the second/HELOC.
When a person or family buys a home with a mortgage, it is registered with the county or city registry as the first mortgage. The first mortgage is paid off first in whatever case. A second mortgage on the other hand is a secured home equity loan against the same property. If you default on your mortgage payments the lender has to wait after the till the first mortgage is paid. For this reason the second mortgage rates may be higher. Second mortgages are usually smaller loans.
Yes. Your mortgage company may hold your first (or primary) mortgage as well as a second which may be represented as a home equity loan or a home equity line of credit.
You can get a home equity loan immediately. In fact, some lenders are packaging home equity loans or credit lines as a combo with the closing on the first mortgage. Of course, to get a home equity loan you have to have some home equity...i.e. a market value greater than the first mortgage.
the main risk is that the first mortgage will not be paid. if the first mortgage is not paid, goes into default, and is foreclosed, the second mortgage will be determined in the foreclosure sale.
If the second mortgage is in default the second mortgagee can foreclose and take possession of the property subject to the first mortgage.
Yes, assuming you have enough equity in the home to get a line of credit. But, if you had enough equity there should not be any PMI. 4lifeguild
The first thing to do when checking a home equity status would be to get in touch with your mortgage lender. They will be able to inform you about how much equity you have and what you can do with it.
Yes. There are 2 ways to refer to a mortgage loan: 1) Lien position on the title (1st mortgage, 2nd mortgage) 2) Product type (loan type: 1st mortgage, home equity loan, home equity credit line) If you only need to borrow $10,000 for example, this will not meet the minimum loan amount for a first mortgage with most lenders. Therefore you may obtain a "home equity loan" which is more often used as a second mortgage, but it will be the primary loan on the home.