Home Equity Loansl

Home equity loans are those that have their real estate as collateral for any loans. This is called home equity because it is actually appraised by the company on how much your home is worth. Say, you want to borrow the full amount equal to your Dominican Republic real estate, the company would determine how much that can be. Though, you may also opt for an amount lower than the full value of your home.

Some company can actually lend you up to 125 per cent of the appraised value of your real estates. Though, there are still other factors that may affect the interest rate of your loans. Some agencies consider credit history, number of credit cards, number and amount of other smaller debts, your current job as well as the chance that you may be having a higher position in your company. Some agencies also checks on your current company’s standing, whether it is projected to grow (or go bankrupt) in the period of your loan payment.

Home equity loans also have different types and terms. There are loans that have very small monthly payment for the first few years, and then towards the end of the loan payment period, the remaining amount would need to be paid in full. Other remaining fees shall also be paid within this period. In most agencies this is called as a balloon mortgage.

There are also some terms wherein the payments throughout the payment period steadily increase. Say, on a twenty year payment term, the first ten years will have a small monthly payment, but as time progresses, the last ten years will have higher payment requirement. This is also known as interest only mortgages. The fist ten years will only pay the interest rate, then the last ten years would pay the principal amount.

Another type of mortgage or home equity loan (though quite malicious) is when your loan can be as high as 125 per cent of your home value. Then, only say 90 per cent is quoted as home equity loan, and the remaining is as a personal (unsecured) loan. This means that you actually incur two loans, wherein the other one can actually take away your piece of real estate but still leave you on neck-high debt.

Home equity debts may be a little risky but then, this is just a matter of paying the monthly cost to avoid your homes from being taken away. Besides, this has lower interest rate that unsecured loans. In the seacoast gated enclaves, an insular bubble of luxury far from the trouble spots, villas and condominiums are selling fast. But make sure that you don’t make the hasty decision and remain in debt or loose your Dominican Republic real estate.

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