Change in Texas Law May Make Reverse Mortgages More PopularWritten by Charles Essmeier
Texas was one of last states to allow homeowners to take out home equity loans. Laws going back to nineteenth century strictly prohibited home equity lending, as legislators feared that unscrupulous lenders would take advantage of homeowners for purpose of seizing their homes through foreclosure. This made it impossible for citizens of Lone Star State to use their equity for home improvements, debt consolidation or paying medical bills, as homeowners in other states may do.
In 1997, Texas constitution was amended to allow homeowners to borrow against their home equity. The amendment allowed for traditional term loans, lines of credit, and reverse mortgages, but did not allow a line of credit on a reverse mortgage.
In a reverse mortgage, owners of homes who are at least 62 years of age may borrow against equity in their home. They need not pay money back until they die, move or sell home. Reverse mortgages have become quite popular in last few years, especially in areas like California, where homeowners may be cash poor but
| | Home Equity Loans Company - 7 Key Questions to Help You Choose OneWritten by John Ross
Choosing right home equity loan can be tricky; you have to consider interest rates and repayment schedules, among others. Choosing right lender, however, does not have to be a difficult task. If you ask right questions, you can pick best lender for your needs. The following is a list of seven essential questions that you should ask any potential lender.1. What are terms? This will include interest rates and length of loan. Some lenders may require you to carry private mortgage insurance or to pay your mortgage through ACH deposit. Get terms in writing, so that you can compare them with other lenders. 2. How about my credit? Your credit score may play a huge factor in deciding which lender to go through. If you have bad or no credit, many lenders may not be able to help you. So you will want to find a lender that offers sub-prime loans for borrowers of your credit status. Bad credit does not necessarily disqualify you for a loan, but it will make process a bit more difficult. 3. What is their reputation? The lender will delve into your personal and financial history, so why shouldn't you do same? If company is public, you should have no trouble finding financial and news information. Look for recent mergers or restructurings that could indicate a potential problem. Be weary of lenders that are not publicly traded. Many lenders use same underwriters, so do your homework beforehand. 4. How much will loan cost me? Closing costs can be a major concern for most homeowners. You probably need home equity loan because you are short on funds or in debt, so coming up with a few thousand dollars for closing costs can be all but impossible for many borrowers. Your lender should be able to provide you with a good faith estimate (GFE) that will outline fees that you will be responsible for.
|
