Home equity is a hot topic in California right now.
California home equity can provide people with a way
to secure substantial loans that can be used towards
projects that have nothing to do with the home, itself.
The loan is based on the difference between the property,
or market value of a house and how much money a person
has paid towards the principal of his mortgage. Due
to the incredibly high costs of homes in California,
a person who has had a property for an extended period
of time could stand to get an extremely large loan.
Most states have limits of 80 percent or 90 percent
on home equity loans. This means that a loan cannot
exceed that percentage of a houseís value. In California,
though, there exists a 125 home equity loan that actually
allows a person to borrow against a sum that is greater
than the value of the house by 25 percent. This means
that a person who has a house worth $400,000 could borrow
against $500,000 in equity. 125 loans are usually only
for people who have excellent credit.
Uses for California Home Equity
Californians who are not eligible for 125 loans can
still come away with a lot of money from a standard
equity loan. Most people apply for the loan initially
because they have a specific need. Home equity loans
are often used for major home repairs or construction
projects like remodeling kitchens, adding bathrooms,
or putting a pool in the backyard. Some people use the
money to get caught up on school loan payments and credit
card bills, while others simply turn around and use
it to purchase a car.
Leverage Your Investment Wisely
Oftentimes, people can be taken aback by the amount
of money they receive from home equity. It is important
to realize that home equity loans require payments like
any other loan. Unlike other loans, though, a home equity
loan puts a personís house in jeopardy, so it is crucial
that a person chooses a loan rate and schedule that
is affordable for him. With so many lenders offering
packages for Golden State homeowners, it is important
to do your homework and locate a broker you can trust.
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