EXPRESS HELOC REFINANCE

A home equity line of credit is a variable-rate account that allows for repeated borrowing without having to re-apply each time. A traditional home equity loan provides you with a fixed amount of money repayable over a fixed period of time at a fixed interest rate. Usually the payment schedule calls for equal payments that will pay off the entire loan within that time. You might consider a traditional home equity loan instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home.

In most cases, a recurring need for funds suggests the need for a home equity line of credit. A good example of this is tuition payments.

To determine the equity available in your home, take your home’s appraised value or tax assessment and multiply it by 80% (the loan to value ratio), and subtract any outstanding liens.

For example, let’s say you’ve had a mortgage on your home of $100,000 for 10 years and have paid down the principal to $60,000. In the 10 years you have owned your home, property values in your area have increased and now your home is worth $125,000. In this particular example, you would be able to borrow up to $40,000 using your home as security for the loan.

This is calculated as follows:
  Appraised value of home: $125,000
Multiply by 80% (loan to value ratio): ($125,000 x .80) $100,000
Less the remainder of the 1st mortgage: – $60,000
Equals: $40,000 in available equity

Home equity loans are available for 1 to 4 family residential units, which are owner occupied as primary residences in Pennsylvania and New Jersey. Property insurance is required. Flood insurance may be required.