Today's Mortgage Rates

When you want to take money out of the equity in your home you may consider a home equity loan.  A home equity loan is a second mortgage on your home that allows you to get cash out of your equity without refinancing your existing FHA mortgage loan.  You can take out a home equity loan to pay for home improvements, remodeling, a wedding, college, traveling, a car, debt consolidation, or anything else you want.

In order to get a great deal on a home equity loan you should consider where you are going to get your loan, for how much, and for how long you want to take to pay back the loan.  Consider these facts:

• Home equity loans are better than refinancing your current mortgage if rates are higher now.  As long as your first mortgage has a better interest rate than the current loan rates you will save money by taking ut a home equity loan rather than refinancing.

• How much money do you need?  The less the better because then you will have a lower monthly payment and you will not overextend your finances.  You will also get a better deal and lower interest rate if you don’t take too much of the equity out of your home so that the fees are lower for the loan and the lender does not consider you high risk because you are leaving some value in your home.
• You can take home equity loans for different terms.  Do you want to pay back the loan quickly over 3-5 years or longer over 10 years?  The less time you take the loan for the lower interest rate you will get, but the monthly payments will be higher.  If you can afford the larger monthly payments you will usually get a better deal if you take the second mortgage for a shorter amount of time.
• The more you shop for your home equity loan the more you can save.  Look at may different lenders and compare the offers they give you.  Then choose the best deal that will save you the most money.

For whatever reason you need a home equity loan consider what you need in order to save yourself money and get the best deal possible.

If a borrower decides that an FHA mortgage loan is right for them, there is a process that the FHA requires the borrower and the property to go through.  The borrower must have a credit check, and the FHA requires the property to have an appraisal.  Obviously, as the FHA insures the loan for the lender, if the borrower can no longer make mortgage payments, the FHA will get the house.  That being said, the most important function of the required FHA appraisal is that it is performed to protect the FHA against a house in bad condition and therefore lowered value.

Many homeowners who purchased their homes with FHA aid believe that the required appraisal constitutes some sort of warranty as to the value or condition of the appraised property.  The truth is that if a borrower discovers some sort of defect with their FHA mortgage loan property, the FHA will do nothing to repair it.  It is the borrower’s responsibility to order a home inspection to find out if the property has any major defects or is in bad condition.  Just remember – the FHA is indeed a mortgage insurer, but this fact does not protect you from problems in the house.

The FHA, or Federal Housing Administration, is a government program that was started during the depression to help affected citizens buy houses who might not have been otherwise able to afford them.  Since the 1960s, however, the FHA’s main purpose has been securing housing loans for low and moderate income individuals with bad credit or an inability to make a down payment.  The FHA does this by insuring the lenders who provide the money to the borrower, so that in the event the borrower cannot make the payments, the FHA will cover the loss.  It should be pointed out that the Federal Housing Administration is the only government agency that is completely financially self-sufficient: it operates at no cost to taxpayers.  Though the FHA has undoubtedly provided thousands of families with housing, the FHA market niche is decreasing.

FHA mortgage loans aren’t for everybody.  Though the standards of obtaining an FHA mortgage are lower than mortgages in the prime market, there are still requirements.  For one, an individual taking out an FHA mortgage must be able to put down 3% of the loan in cash.  Furthermore, the borrower’s credit rating can be blemished and imperfect, but the borrower cannot have had a foreclosure in the last 3 years.  As for loan limits, the FHA rates vary widely around the United States, so it’s best to check with your local lenders.  Some have claimed that the low FHA loan limits have caused their decline in the last decade, as the FHA loan limits are lower than traditional Freddie Mac or Fannie Mae loans.

If you can afford to make a 3% down payment in cash, and fit the rest of the requirements, then there is only one more thing to consider: would another type of mortgage suit your needs better?  The decline of FHA loans have been partially blamed on option adjustable rate mortgages and interest-only mortgages.  Check out all of your options in order to decide what would work best for you.  The FHA does do a credit check, obviously, so be prepared to deal with this process when applying for an FHA mortgage loan.