How to Utilize Your Cash Investment in Your Home

Have you ever noticed how hard it can be to get to the equity in your home?

Recently I had a client come to my office who had quite a bit of equity in their home. I'm not talking about $50,000 or even $200k, I'm talking about over $250k. I was asked to get 80% out of their home so that they could re-invest the monies elsewhere.

From an application stand point this person had no reason not to qualify. They had great credit scores, tons of assets and the loan-to-value on the home was nothing to be concerned about. The only problem we came across was that they were business owners and had taken a loss on their taxes the year before therefore we could not show any income documentation.

Lenders have ways of protecting their interest through limiting cash out and verifying their investments. Although my client had everything with exception to the income documentation we were limited to getting $250k out of their home. Locked into a good rate, we moved forward and closed the deal that limited us with getting the cash out.

We then went looking for a lender that would be more willing to give us the cash out but knew it would be at a higher rate due to the potential for risk. The rate for the rest of the money turned out to be about 1% higher.

This got me thinking about utilizing my home as an investment:

1. How much does the bank pay you when you pay down your loan, yet they maintain their right to take your property until you have paid your entire debt?

2. What happens when you find yourself in a difficult situation and need to pay less than the monthly payment?

3. What happens when you need to get to the money you have diligently worked so hard to pay down? You have to qualify, yet you own the asset.

My recommendation is to maintain a way to get to your investment. I am not so much recommending that you take out the money as you at least set up a Line of Credit so that you can get to the money should you need it.

Angela Talent, Your Mortgage Advisor! is a loan agent for Allied Capital Loans in Folsom. You are free to distribute this article as long as you include this resource box and make all links active.

---

Mortgage Calculator ? How to Calculate Your Monthly Mortgage Payment

Just starting to shop for a new home? Do you... Read More

Debt Counseling ? Healing Touch for the Ailing Finances

The financial stories remain similar over the months and the... Read More

To Refinance or not to Refinance -- Here is the Answer

I have written many articles on refinancing a fixed rate... Read More

What is a Self-Employed Mortgage?

Self-employed mortgages, as the term implies are mortgages designed for... Read More

Securing the Best International Mortgage for Your Home in Spain

Are you one of a growing number of people planning... Read More

Home Mortgage Loan Refinance ? Benefits To Refinancing Your House Online

Here are some of the benefits to doing your home... Read More

Home Mortgage Rate Shopping - Why Some Shoppers Give Up And Others Dont

About 29% of current homeowners and a much larger percent... Read More

Home Mortgage Loan Refinancing Online - 3 Tips on Refinancing Your Home

When refinancing your home, it's helpful to know a few... Read More

How to Shop Around for the Cheapest Mortgage Deal Online

Before you start shopping around for a mortgage, you need... Read More

Home Equity Loan ? Still a Better Idea Than a 401(K) Loan

Anyone who borrows money is always looking for the cheapest... Read More

Sound Financial Standing Entails Capital Raising Remortgage

Raising capital is integral for growth and expansion of an... Read More

Types of Home Equity Loans

There are at least two types of home equity loans.The... Read More

Bad Credit Home Loan - Apply Online and Keep Your Credit Score as High as Possible

If you have a poor or bad credit history with... Read More

How Homeowner Can Save Their Home From Foreclosure

Drive around and see how many signs you see that... Read More

Which is Better? Fixed-Rate or Adjustable-Rate Mortgages

The answer depends on several factors including your financial situation.... Read More

Consolidate Debt With A Home Equity Loan

If you are a home owner who is having to... Read More

Poor Credit Mortgage Reigns High Among Mortgages Available to Bad Credit Borrowers

Like a big brother keeping notes of the erring behaviour... Read More

VA Loans, A Gift from Uncle Sam

Uncle Sam has a gift for the men and women... Read More

Mortgages After Bankruptcy: Easier Than You Would Expect

Give yourself time to rebound. Whether you had to turn... Read More

Choosing a Real Estate Agent

Before you go looking at houses, you'll need to find... Read More

What Your Mortgage Lender Is Not Telling You About Accelerated Mortgages

For years, mainstream banks and financial advisors have been recommending... Read More

How To Tap In To Your Home Equity

With today's relatively low interest rates and climbing property values,... Read More

Homeowner Loans ? Drawing Lessons of the Past

Loans are not of a recent origin. People used to... Read More

Mortgage-Refinance Loan Can Put Cash in Your Pocket

Do you need cash? Here's a mortgage for you. If... Read More

Home Equity Line of Credit - Finding The Best Home Equity Lender

Borrowing against the value of your home using a revolving... Read More

Life of an Escrow

Escrow is one of the last stages in the purchase... Read More

Seller Financing

Although any loan used for buying real estate is strictly... Read More

Bad Credit Mortgage Lenders - Things You Should Know About Subprime Lenders

Interest rates and fees vary between subprime lenders just like... Read More

Shopping for a Mortgage, Avoid Three Common Mistakes

Buying a home or refinancing one is perhaps the largest... Read More

Homebuyers Loan Guide

If you are a homebuyer, there are a few points... Read More

Mortgage After Bankruptcy

Most people probably assume that obtaining a mortgage to purchase... Read More

Interest-only Mortgages Have Their Pitfalls

Rising home prices, particularly on the East and West coasts... Read More

FHA Mortgage: When Your Downpayment is a Gift

There has been so much fraud discovered in the FHA... Read More