Owning your own home is one of the greatest achievements you can have in this country. Many people strive for this their entire lives, and it marks a significant financial achievement. When you own your own home you are treated differently by others and you have a whole new world of financial opportunities that are open to you.
Since you own your own home, you are building up something called equity. Equity is simply the value of your house minus the amount of money you owe on it. For example, if you owe two hundred thousand dollars on your house, and it's worth four hundred thousand, then you've got two hundred grand in equity. You can borrow against this at incredibly low rates.
How do you get this cash? Through a home equity loan, or a refinance. Sometimes this is called a second mortgage. Basically, you borrow money based on the value of your house. You can either get a separate loan, or get a brand new one. Either way you come out ahead.
The main reason people usually do this is to pay off your credit cards. You simply borrow some money against the equity in your house, and use that many to pay off your credit cards. The amount of your payments on this new loan will be much less than your credit cards, since the interest will be much lower.
Paying for your children's education is another reason to take out a second mortgage. The interest rates on student loans can be pretty high, since they are basically unsecured. With a refinance loan you will be getting much lower interest rates.
One reason people take out second mortgages is to go on vacation. If you've got a trip in mind that you've always been dreaming of, then a refinance loan can make it possible. You'd be surprised how low your payments will be when you decide to take a cruise around the world or spend a summer in the south of France.
Naturally, there are plenty more excellent reasons to take out a second mortgage. Once you see how easy it is, you'll be eagerly looking forward to spending your new money.
Since you own your own home, you are building up something called equity. Equity is simply the value of your house minus the amount of money you owe on it. For example, if you owe two hundred thousand dollars on your house, and it's worth four hundred thousand, then you've got two hundred grand in equity. You can borrow against this at incredibly low rates.
How do you get this cash? Through a home equity loan, or a refinance. Sometimes this is called a second mortgage. Basically, you borrow money based on the value of your house. You can either get a separate loan, or get a brand new one. Either way you come out ahead.
The main reason people usually do this is to pay off your credit cards. You simply borrow some money against the equity in your house, and use that many to pay off your credit cards. The amount of your payments on this new loan will be much less than your credit cards, since the interest will be much lower.
Paying for your children's education is another reason to take out a second mortgage. The interest rates on student loans can be pretty high, since they are basically unsecured. With a refinance loan you will be getting much lower interest rates.
One reason people take out second mortgages is to go on vacation. If you've got a trip in mind that you've always been dreaming of, then a refinance loan can make it possible. You'd be surprised how low your payments will be when you decide to take a cruise around the world or spend a summer in the south of France.
Naturally, there are plenty more excellent reasons to take out a second mortgage. Once you see how easy it is, you'll be eagerly looking forward to spending your new money.
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