Keep in mind that if you need to borrow money, home equity lines may be one useful source of credit. Initially at least, they may provide you with large amounts of cash at relatively low interest rates and they may provide you with certain tax advantages unavailable with other kinds of loans.
Keep in mind that home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments.
Those loans with a large final payment may lead you to borrow more money to pay off this debt, or they may put your home in jeopardy if you cannot qualify for refinancing. If you sell your home, most plans require you to pay off your credit line at that time. In addition, because home equity loans give you relatively easy access to cash, you might find you borrow money more freely.
Regulators and competitors in the Nevada mortgage market are beginning to take away some companies roles as the biggest sources of money for Nevadans buying homes. The two companies, which are federally sponsored, are beginning to lose their forty percent control over all housing loans after many accounting mistakes led to a call for increased regulation from the Bush administration. The companies are down from a record seventy percent of mortgage bond sales in 2003, to thirty-eight percent of mortgage bond sales this year.
Nevada homebuyers increasingly prefer adjustable rate mortgage loans to the fixed rate debt loans Fannie Mae and Freddie Mac typically buy. Twenty-five percent of this year's Nevada mortgage loans will most likely be ARM’s.
ARM’s took off in Nevada because homebuyers wanted lower interest rates and more flexibility after Nevada housing prices rose fifty-seven percent in the past five years. Fannie Mae and Freddie Mac, bogged down by three years of well publicized federal investigations, failed to adapt to these lower rates.
Additionally, ARM’s grew to thirty percent of new Nevada home mortgage loans last year from seventeen percent in the previous year.
More than eighty percent of the home mortgage loans backing the bonds sold by some companies have fixed Nevada interest rates. Do not forget that there are other ways to borrow money from a lending institution. For instance, you may want to explore second mortgage installment loans.
Although these plans also place an additional mortgage on your home, second mortgage money usually is loaned in a lump sum, rather than in a series of advances made available by writing checks on an account.
You also may want to explore borrowing from credit lines that do not use your home as collateral. These are available with your credit cards or with unsecured credit lines that let you write checks as you need the money.