Brian Maloney asked:
Life is ‘plum full’ of misunderstandings and confusion about terminologies associated with important subject matter such as borrowing. Much like the seemingly confounding aspects of the home equity loan vs. second mortgage. A vast percentage of people still don’t understand the differences of the two; or merely associate both as being virtually the same, but with different names.
For the purposes of setting the record straight, a real and true second mortgage, is a fixed rate of fifteen to thirty years in duration. Your credit is the basis at which the bank determines your terms, rate, and whether you will be paying points to obtain it.
Furthermore, the true definition of a second mortgage is best noted as a style or type of home equity loan rather than the exact same. On the other hand, a home equity line of credit (HELOC), is what most lenders would describe a mere home equity loan. In essence, if you are proposed a HELOC, it is more than likely, a primary home equity loan.
This type, has a revolving line of credit that is usually more in terms of fees, but less costly in terms of rates you pay. The second mortgage is somewhat opposite, in that it is higher in rates, but lower in fees associated with it.
There is no doubt that people confuse both and commingle the two together for ease in understanding the two. However, they are somewhat autonomous from each other, and provide a much different service overall when examined properly!
In addition, the HELOC even allows for a credit card that can be used to at your discretion, provided the bank dispenses you one at the time of closing. Moreover, the line of credit can have fluctuating rates from the outset or even after a period of time has passed. Although, you can lock in a fixed rate with this style but must keep that in mind before closing the deal.
Take advantage of these ever popular loan products in this time of low rates and favorable terms overall!
Click here for Retail Heaven!
Life is ‘plum full’ of misunderstandings and confusion about terminologies associated with important subject matter such as borrowing. Much like the seemingly confounding aspects of the home equity loan vs. second mortgage. A vast percentage of people still don’t understand the differences of the two; or merely associate both as being virtually the same, but with different names.
For the purposes of setting the record straight, a real and true second mortgage, is a fixed rate of fifteen to thirty years in duration. Your credit is the basis at which the bank determines your terms, rate, and whether you will be paying points to obtain it.
Furthermore, the true definition of a second mortgage is best noted as a style or type of home equity loan rather than the exact same. On the other hand, a home equity line of credit (HELOC), is what most lenders would describe a mere home equity loan. In essence, if you are proposed a HELOC, it is more than likely, a primary home equity loan.
This type, has a revolving line of credit that is usually more in terms of fees, but less costly in terms of rates you pay. The second mortgage is somewhat opposite, in that it is higher in rates, but lower in fees associated with it.
There is no doubt that people confuse both and commingle the two together for ease in understanding the two. However, they are somewhat autonomous from each other, and provide a much different service overall when examined properly!
In addition, the HELOC even allows for a credit card that can be used to at your discretion, provided the bank dispenses you one at the time of closing. Moreover, the line of credit can have fluctuating rates from the outset or even after a period of time has passed. Although, you can lock in a fixed rate with this style but must keep that in mind before closing the deal.
Take advantage of these ever popular loan products in this time of low rates and favorable terms overall!
Click here for Retail Heaven!
Tags: Heloc, Terminologies, Thirty Years
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