PROGRAMS - HOME EQUITY
FEATURES
Unlock the cash in your home today
For many people, their home is both their biggest investment and source of savings. When they need to borrow money for major expenses, or to pay off accumulated debts, they can use their home value to borrow money.
We offer fixed-rate Home Equity Loans and variable-rate Home Equity Lines of Credit (HELOCs) to suit your needs. With these products, you can borrow up to 100 percent of the value of your property. Use this money for:
- Home improvements
- Debt consolidation
- Medical bills
- College tuition
- Extra cash
Whatever your immediate cash needs are, a Lexington Home Loans Home Equity Loan of Line of Credit gives you the power to tap into the equity of your home. Securing your Line of Credit today offers you financial security for the future, should you ever need quick access to cash.
HOME EQUITY LOANS AND LINES
You've worked hard to increase your home's value. You can put that value to work with an home equity loan or a Equity Line of Credit. Home equity products typically offer lower interest rates than many loan programs, and just like your mortgage, the interest you pay may be 100% tax deductible (consult a tax advisor concerning interest deductibility).
Through a Lexington Home Loans home equity loan or Prime Equity Line, you can use the equity in your home for:
- Debt Consolidation
- Home Improvement or Major Purchase
- Refinancing and Cash Out
Many banks offer home equity products, but what sets Lexington Home Loans apart is our ability to simplify and potentially shorten the process, while offering you informed and objective advice about your options.
Tax Advantage
A home equity line of credit is a lot like a credit card. You can continuously use it up to your credit limit. One of the best parts of a home equity line of credit is that the interest rate is typically lower than a credit card and the interest paid can be tax deductible (consult your tax advisor about your personal situation).
Most home equity loans are simply second mortgages. They have fixed rates with longer terms over a fixed period of time. These loans are amortized – your monthly payment is applied to principal and interest. You receive the amount of money you borrow in one lump sum. For this reason, home equity loans can be ideal for longer-term financial goals.
Debt Consolidation
Does your credit card balance never seem to go down? You can potentially reduce your monthly payments – and pay off debts – by using the equity in your home to consolidate your debt into one easy-to manage package.1
Home equity debt consolidation allows you to:
- Potentially reduce your monthly payments 1
- Simplify finances-one payment instead of many smaller ones 1
- Possibly deduct interest on you taxes 2
- Build a new room addition that could keep your family happy in your home for years to come
- Upgrade the floors, doors fixtures, and appliances to increase the resale value of your property
- Improve your quality of life by building a garden or swimming pool in your backyard
- Purchase a vehicle
- Pay for the big wedding
- Take the vacation you've been postponing
- You plan on living in your home for a number of years
- You've built up considerable equity in your home
- Lower Your Monthly Payments
- Will a second mortgage allow me to borrow funds against my existing property?
- How do I know how much equity I have in my property?
- How can I draw credit when I need it?
You can elect either a home equity loan or an Equity Line of Credit, depending on your particular need. To pay off specific credit balances, a home equity loan may be the best option. To pay off expenses as they occur, you may wish to consider a Equity Line.
In both cases, Lexington Home Loans Home Equity representatives can design the right financing for your needs, and our quick turnaround affords you the opportunity to start saving money within a few short weeks of approval.
For other financial planning advice consult your Lexington Home Loans Financial Advisor.
Home Improvement or Major Purchase
A home is most people's biggest asset. Using a home equity loan product from Lexington Home Loans, the equity you've built into your home can be used to make a wide range of home improvements. Best of all, the interest you pay may even qualify for a tax deduction* -just like your mortgage.
With a home equity loan or Equity Line-of Credit, you could:
The value of your home can also be used to buy many other things you want but may not have been able to afford, from a recreational vehicle to a vacation home. Home equity loan products enable you to:
If you have the plans, Lexington Home Loans loan counselor can help you obtain the financing to complete them.
Refinancing and Cash Out
Recently, low rates have prompted many homeowners to consider refinancing their existing mortgages. If the interest rate you are paying on your existing mortgage is higher than current interest rates, you may reduce your monthly payments* by using the existing equity in your home to refinance. You may benefit from refinancing if:
If interest rates are significantly or even slightly lower than when you bought your house, or if you want to convert from an adjustable to a fixed rate loan to gain greater stability, refinancing through a home equity loan may lower your monthly payment.*
Reduce Your Interest Rate
Credit cards, auto loans, and second mortgages often carry an interest rate far higher than that of a home equity loan or an Equity Line of Credit. Refinancing may decrease your monthly interest charges.*
Convert Equity/Cash Out
If you've built up considerable equity in your home, you may be eligible to refinance to a larger loan amount. This would provide you additional cash that could be used for debt consolidation, home improvement, or for personal use.* the interest paid on your "cash out" refinance, unlike personal loans, should be tax deductible (consult your tax advisor concerning interest deductibility).
BENEFITS OF APPLYING FOR A HOME EQUITY LINE OF CREDIT OR A HOME EQUITY LOAN
Home equity lines of credit or home equity loans, you've probably heard about using these types of home equity financing products to meet your financial goals. You can tap into your home's equity and use the money to consolidate your debts*, finance your remodeling projects, pay your children's tuition, buy a new car or a boat, or even take your dream vacation. Tapping into the equity built in your home is a wise choice that allows you to take advantage of lower interest rate. Furthermore, some of Lexington Home Loans's line of credit options do not even requires and appraisal of your house. Interest on both a home equity loan and line of credit may be deductible (consult your tax advisor about your personal situation).
HOME EQUITY FAQ
What is the difference between an Equity Line of Credit and another type of second mortgage?
What is the Difference between an Equity Line of Credit and another Type of Second Mortgage?
An equity Line of Credit is money in an account that can be used as you need it. You can use any portion of it at any time and pay it back at any time. The interest rate is usually variable and is tied to the prime rate. Other types of second mortgages, such as the Home Equity Loan, and 125% loans are simple interest products. You borrow a lump sum and pay it back over a period of years with interest. The interest rate for these products is fixed.
Will a Second Mortgage Allow Me To Borrow Funds Against My Existing Property?
Lexington Home Loans offers several solutions to borrow funds against your existing property value.
Home equity Line of Credit - If you want a reserve of funds you can draw on in the future, choose our Home Equity Line of Credit. You'll have the credit you need when the need arises – and you make no monthly payments until you draw on it. Be ready for expenses like medical bills, emergency home repairs, tuition, and more.
Home Equity Loan - If you want to borrow up to 100% of your home's value at a fixed rate of interest, choose out Home Equity Loan. Use those funds for a purchase opportunity, home maintenance, debt consolidation, or major expenses.
High Loan-To-Value - If you want a large sum of cash, choose one of our high Loan-To-Value product – 125% loan. With low equity – even no equity – Lexington Home Loans can still loan you the funds you need to make home improvements, consolidate debt, buy a car, or make an investment.
To learn more about these and other products, call us any time at 1.888.548.0553.
How Do I Know How much Equity I Have In My Property?
Equity is the value of a homeowner's interest in real estate. Equity is computed by subtracting the total of the unpaid mortgage balance and any outstanding liens or other debts against the property from the property's fair market value. A homeowner's equity increases as he or she pays off his or her mortgage or as the property appreciates in value. When a mortgage and all other debts against the property are paid in full, the homeowner has 100% equity in his or her property.
How Can I Draw Credit When I need It?
If you want a reserve of funds you can draw on in the future, choose our Home Equity Line of Credit. You'll have the credit you need when the need arises – and you make no monthly payments until you draw on it. Be ready for future expenses like medical bills, emergency home repairs, tuition, and more.
What is the difference between an Equity Line of Credit and another type of second mortgage?
An Equity Line of Credit is money in an account that can be used as you need it. You can use any portion of it at any time and pay it back at any time. The interest rate is usually variable and is tied to the prime rate. Other types of second mortgages, such as the Home Equity Loan, and 125% loans are simple interest products. You borrow a lump sum and pay it back over a period of years with interest. The interest rate for these products is fixed.
How do I know how much equity I have in my property?
Equity is the value of a homeowner's interest in real estate. Equity is computed by subtracting the total of the unpaid mortgage balance and any outstanding liens or other debts against the property form the property's fair market value. A homeowner's equity increases as he or she pays off his or her mortgage or as the property appreciates in value. When a mortgage and all other debts against the property are paid in full, the homeowner has 100% equity in his or her property.
Will a second mortgage allow me to borrow funds against my existing property?
Lexington Home Loans offers several solutions to borrow funds against your existing property value.
Home Equity Line of Credit - If you want a reserve of funds you can draw on in the future, choose our Home Equity Line of Credit. You'll have the credit you need when the need arises – and you make no monthly payments until you raw on it. Be ready for expenses like medical bills, emergency home repairs, tuition, and more.
Home Equity Loan - If you want to borrow up to 100% of your home's value at a fixed rate of interest, choose our Home Equity Loan. Use those funds for a purchase opportunity, home maintenance, debt consolidation, or major expenses.
High Loan-To-Value - If you want a large sum of cash, choose one of our high Loan-To-Value product – 125% loan. With low equity – even no equity – Lexington Home Loans can still loan you the funds you need to make home improvements, consolidate debt, buy a car, or make an investment. To learn more about these and other products, call us any time at 1.888.548.0553.
CREDIT ISSUES
Having good credit makes it easier to get a loan. Good credit also helps you take advantage of lower interest tares and reduce your monthly loan payments.
Use the links below to get fast facts on credit. Discover why your credit history is important and how to improve your credit rating.
Credit basics
Find out what exactly credit is and why it's important to you.
How Credit Affects Rates
See how your credit affects the rates you're offered on loans.
About Credit Score
Learn about credit bureaus and how you can get a copy of your credit report.
How Credits Scoring Works
See what affects your credit score and why.
Credit Basics
Generally speaking, "good credit" means paying your bills on time and maintaining a personal financial profile that helps to make lenders confident that you will make mortgage payments on time. Good credit also means that you are not "over tended" or borrowing so much that you are putting yourself at risk for financial problems.
Good credit makes it easier to get a loan when you need it, and helps you get lower interest rates when you borrow.
Take a few minutes to learn about credit, credit ratings and how to avoid overextending yourself financially.
Why is credit important?
Good credit makes it easier to get loans, credit cards, and better interest rates when you borrow. Credit problems, on the other hand, make it harder to get a loan or lower interest tare often when you could use some help the most.
Unfortunately, credit problems don't go away overnight. Late payments a year or more ago can affect your credit history today. Major problems, like bankruptcy or a loan default, appear on your credit record for years.
What lenders are looking for:
Lenders evaluate credit risk, the likelihood that a borrower will make payments on time and pay off the loan. Some lenders have very strict guidelines and evaluate borrowers "by the book". At Lexington Home Loans, we're dedicated to getting the whole story so we can work with you to find a loan solution that's right for you.
To judge credit risk, lenders typically look at:
Income: Regular and documentable income from earning, commissions, investments, rental payments and other sources. Lenders look for a steady income month to month and a stable work history.
Assets: Debts such as mortgage loans, home equity loans, credit card balances, car loans, students loans and other consumer debt.
Other Financial Information: Situation that could affect payments, such as lawsuits, collection activity, recent bankruptcy or property foreclosure, obligation to pay alimony or child support, or being a co- signer on another loan.
Payment History: Making timely mortgage or rent payment is very important. Paying late just once by 30 days or more can affect both the loan and the interest rate offered you. Late payments on credit cards, car payments and other bills are also factors.
Credit Reports: National credit bureaus collect information and provide reports to home lenders and other creditors/ credit reports include details on credit accounts and information on your payment history.
Debt-to –Income: Monthly debt expenses and income get converted to a debt-to-income ratio. While there isn't a standard, Lenders often have a maximum number that they will allow a borrower to have.
All the factors listed above work together to affect a person's credit. That's why people with good income and prompt payment histories but a lot of debt might have trouble getting loans. And why individuals with plenty of income and few debts could also have problems if they're often late paying bills or have not established credit.
But here's the good news. Anyone can improve his or her credit rating over time.
Want more good news? Lexington Home Loans considers your future as well as your past. In fact, we offer Free Loan Consultations, as well as special loan programs designed to help you improve your credit and your credit rating.
So as you review the steps that follow to improve your credit, remember you can always contact Lexington Home Loans for additional information and assistance.
The information in this section provides a general overview if some of the factors that affect consumer credit scores and rating based upon information provided to us by the companies that developed credit scores. Unfortunately, Lexington Home Loans is contractually prohibited (as are other mortgage lenders) from providing a customers with his or her numerical credit score. We have asked the companies that developed credit scores to allow us to provide customers like you with your score as an additional customer service but have not yet received permission.
How Credit Affects Rates
Good Credit=Lower Interest Rates
Any time a lender gives a consumer a loan, line of credit or credit card, there is a risk that the borrower may not repay theloan on time or at all. If a borrower doesn't repay the loan or pays late, it costs the lender a great deal of money.
Lenders use your credit history, along with information on salary, assets and debts, to predict how much risk is involved with the repayment of the loan. This is much like insurance companies using your driving history to predict your risk of having an accident.
The Difference between Low And High Credit Risk:
Low Credit Risk
Borrowers with good credit histories, high credit scores, steady income and relatively few debts present a low risk of loss for lenders. So these borrowers often qualify for loans or credit lines with lower interest rates.
High Credit Risk
A borrower who has had credit problems, whose income varies substantially from month to month, or who already owes a lot of money in relation to income poses a higher risk for the lender. In order to offset the potential loss of money if the borrower can't make payments, the lender must charge a higher interest rate on the loan. But over time, a borrower can rebuild a good credit rating in order to take advantage of lower interest rates.
The information in this section provides a general overview of some of the factors that affect consumer credit scores and ratings based upon information provided to us by the companies that developed credit scores. Unfortunately, Lexington Home Loans is contractually prohibited (as are other mortgage lenders) from providing a customer with his or her numerical credit score. We have asked the companies that developed credit scores to allow us to provide customers like you with your score as an additional customer service but have not yet received permission.
About Credit Scores
Credit scores are numeric values that rank the risk of default by an individual according to their credit history at a given point in time. Your score is based on your past payment history, the amount of credit you have outstanding, the amount of credit you have available, and other factors. According to Fannie Mae and Freddie Mac, two of the largest purchasers of home loans from mortgage lenders, credit score have proven to be very good predictors of whether a borrow will repay his or her loan.
Many lenders use credit scores to help evaluate loan applications. A credit score, however, is just one of many factors considered in the underwriting process. Lenders look at the entire picture. Even when a credit scores is low, lenders often try to find other factors that could overcome the negative credit issues and satisfy their lending requirements.
Three national credit bureaus (Equifax, Experian and Trans Union) collect credit information and provide repots and credit scores to lenders. Lenders often use a "merged" credit report, considering the information and scores provided by all 3 of the credit bureaus.
Different lenders may have different standards for loan approval, based on credit scores and other factors. Because credit bureaus don't currently provide credit scores to consumers, it's important to talk with lenders about how you credit profile fits with their requirements and loan programs.
Have You Checked Your Credit Report?
Many people who think they have good credit are surprised to find issues in their credit reports.
Sometimes that's because they don't understand how borrowing and bill-paying habits affect their credit rating. And sometimes it's because the credit bureau has outdated or incorrect information, or because another consumer's information is mixed with their reports due to similar names or other errors.
It is a good idea to check your credit report every year or so. It's especially important if you plan to apply for a mortgage or another major loan to do so before you apply, in order to improve your ability to obtain a loan or appropriate terms.
If you find mistakes in your credit report, you can take steps to correct them, and if you find issues you didn't know about, you can learn how to avoid those kinds of issues in the future.
You Have the Right to Receive Your Credit Reports
You have the right to get a copy of your personal credit report at any time.
By law, if you have been turned down for a loan or credit card within the last 60 days based on the information in a credit report, you are entitling to a free report from credit bureau(s) that provide the report to the lender. You're also entitled to 1 free report per year if you're on welfare, are unemployed and plan to look for a job within 60 days, or your report is inaccurate because of fraud.
If you are entitled to a free report, you must contact the credit bureau(s) separately, see below.
Otherwise, there may be a fee for each report you request (about $18.00; charge may vary by state).
