Home Equity - What It Is and What You Can Do With It
Home equity is how much your home is worth less what you owe on it. Keep in mind; this is not just how much you paid for it. Home equity is partially based what your home would be bought for in the current market. Depending on the conditions of your loan and the housing market in your area, this can work against you.
Head Over Tails - When Mortgages Outweigh Home Equit
Have you ever heard about anyone ending up "upside down" on their home loan? This is when a homeowner owes more on a house than its appraised value on the open market. If a homeowner in this situation sells the house, they would still have to pay the bank the remainder of what they owe.
This is obviously a very bad situation to be in, and if you find yourself in a similar situation you should contact Advantage CCS for housing counseling in Pennsylvania. We can help educate you and help you understand your options.
Borrowing Against Time - Reverse Mortgages
Home equity also plays an important role in reverse mortgages. These are a type of loan marketed to seniors under the premise that they will get to continue living in their home and they won't have to make monthly loan payments either. The caveat is that the amount that has to be paid back grows and grows until the house is sold, the borrower moves out of the home for a year or more, or the borrower passes away.
These loans can help seniors deal with costs they may face, but they can also be abused. Pennsylvania housing counseling can help you sort out what is the best path for your finances and your home.
Consumer Credit Counseling and Home Equity
Utilizing housing counseling can help you avoid situations which can end in foreclosure and can help you have more money in the long run. Managing home equity can be tough, but there are people who can help you if you find that you cannot manage your current housing payment.