California Home Equity
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 house’s 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 person’s 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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