Bankruptcy Home Equity Loan Choices

Many who file for bankruptcy use home equity in their settlement arrangement. Bankruptcy does not remove any liens on a home such as a mortgage. But if there is more home equity built up than is required to cover the loan, it is an asset that can be tapped into for needed cash in accordance with the rules of the type of bankruptcy a person has filed.

Bankruptcy is a legal proceeding where a debtor declares an inability to pay debts as they become due. Since the Bankruptcy Abuse Protection and Consumer Protection Act of 2005, personal bankruptcy filings for the year ending June 30, 2006, fell 9.46 percent to 1,453,008.

The two most popular bankruptcy options are:

Chapter 7 - Its purpose is to achieve a fair distribution of the debtor’s available non-exempt property. Unsecured debts not reaffirmed are discharged, providing a fresh financial start.

Chapter 13 - Available only to someone with regular income whose debts do not exceed specific amounts. It is used to budget future earnings under a plan to pay unsecured creditors.

In a chapter 7 bankruptcy, every state has its own laws regarding the type and amount of property a person can keep. Under chapter 13, a person does not have to surrender any property.

“It’s important to have competent counsel advise you,” says Ted Janger of The American Bankruptcy Institute; “both about the choices among chapters and about how best to make sure that bankruptcy operates to solve your financial difficulties, rather than just as a hiatus.”

Bankruptcy negatively impacts your credit in the short and medium term because it remains as a black mark on your credit report for up to ten years. However, some creditors offer new loans to bankruptcy debtors because they cannot file bankruptcy again for many years.

Mike Hamel is the author of three business books and several articles about mortgage financing. His material is featured on sites like http://www.badcreditmortgagerefinancingnow.com To see if a bankruptcy home equity loan makes sense in your particular situation, you can complete the no-obligation loan request at Bad Credit Mortgage Refinancing Now.

Article Source: http://EzineArticles.com/?expert=Mike_Hamel

Home Equity Can Help You Resume Life after Bankruptcy

First, the good news. Your bankruptcy has been discharged, and your monthly obligations are lower. While bankruptcy protection doesn't necessarily relieve you of all your monthly obligations, you probably wouldn't have filed if it didn't significantly improve your financial picture. You should be better equipped to manage your normal debt load.

Now, the bad news.

You still need cash and your credit is trashed. Filing for bankruptcy doesn't mean that life stops. You may find that you need money for education, a wedding, medical bills, or home improvement--but now you have a bankruptcy under your belt and no one wants to lend you money.

It's hard to blame creditors for being leery of offering financing to an applicant who has already demonstrated a willingness to write off debt--regardless of the reason. And some experts estimate that one in ten bankruptcies involving real estate financing is not the borrower's first. Creditors don't want to come out on the losing end of a future bankruptcy.

Next, the good news--maybe.

Lenders probably won't grant you an unsecured loan, but you might still be able to find the cash you need. If you own your home and were allowed to retain your equity when your debts were discharged, a loan secured by your house may be the most feasible and affordable way to raise cash.

If your need is great and immediate, and you know that you can make your payments, look into qualifying for a home equity loan after discharging your bankruptcy. Consider carefully the implications before committing to a loan--you will be securing it with your house, and failing to make the payments could cost you the only asset you have left.

Cashing in on Your Home Equity.

First, get an idea of what your home is worth by checking out recent sales in your neighborhood or using an online residential property value estimator. The lender will need to know the amount of available equity, and will want a copy of your bankruptcy documents and credit report. Check online or locally for post-bankruptcy home equity mortgages, compare rates and terms and find a deal you can live with.

By Gina Pogol

Home Equity Loan Pros and Cons

A Home Equity loan is a second mortgage that is secured by the equity in your home. It generally comes in one of two forms. One is the Home Equity Line of Credit, or HELOC, which works much like a credit card and allows you to draw money against your equity whenever you need it. The other form of second mortgage is the home equity loan, or HEL, which gives you the proceeds of the loan in a lump sum. Unlike the variable-rate HELOC, this loan's interest rate is fixed and has a set repayment schedule. The term of a home equity loan is usually limited to no more than 20 years, and total loan-to-value levels (first and second mortgages combined together) are generally 80% or less.

Home equity loans can have many positives. To begin with, you have quick access to cash at a favorable interest rate. Lending institutions generally offer home equities at competitive rates, depending on your credit history and the prevailing interest rate climate. And your loan payment is at least partially offset by the fact that the interest paid on second mortgages is almost always tax deductible. In addition, as long as homes continue to appreciate in value, the equity automatically helps to replenish itself even as you pay back the loan.

Furthermore, if you were to compare the interest rate of a home equity loan with that of a credit card or standard personal consumer loan, you’d find the home equity rates to be considerably lower. Rates on those funds are generally in the double-digit range, and can be laden with service charges and hidden fees. A home equity loan is relatively inexpensive to obtain, and the money can be used for virtually any purpose that you’d like: home improvements, college tuition, debt consolidation, a new car or even a vacation.

There are a few drawbacks that must also be considered, however. Many homeowners do prefer the fact that the home equity loan comes with a fixed rate; however, that rate is almost always higher than that of a regular 30-year fixed-rate first mortgage because the loan is in the second lien position. This makes the loan somewhat riskier for the lender because, in the event that home values fall and the property is foreclosed upon, they might not be able to recoup all of their investment. This higher rate is often somewhat exacerbated by the fact that the term of the home equity is only 20 years, thus creating a somewhat higher monthly payment than might be expected. This can be offset to some degree by the fact that home equities are generally much smaller loans to begin with.

The bottom line with home equity loans, as with all financial products, is to be mindful of your own personal bottom line. Equity in your home can seem like money growing on trees, but be careful how much you pick. Compare loans and lenders, take only what you need, and make sure that the monthly payment is comfortably within your budget.

By: www.finweb.com

Home Refinancing Rate

Home refinancing rates have been at an all-time low for the past decade and are only now moving upward at a slow rate. The drop in the American economy during the late 1980's when they skyrocketed caused more people to buy less property, but many used that period to save their expendable income. As the rates dropped in the 1990's, the homeowner market took a leap upward as many took advantage of the lower home refinancing opportunities to recover from other debts or to use equity in home values, which rapidly increased during that period, to purchase new investment property with the cash-out equity of their current mortgage. Discuss the terms in full with a lender and know what obligations the home refinancing rate demands.

A current rate is around the 4 - 6% range depending on the length of the loan and the ARM applicable to the fixed rate or variable rate loan. Some are higher than the 2-3% mortgages offered less than five years ago, but this current home refinancing rate is lower than only eight to ten years ago when the "good" rates were 7-9%. These numbers have changed dramatically and in turn so have the house values. Property is assessed at a much higher rate than ever before and a home built for less than $10,000 thirty years ago can now demand a resell price of over 15 times that amount. The trade off is the ability to draw off the equity of 5% more or less and reinvest in new property or pay off other debts or use it to lower previous home refinancing rates on earlier loans.

A homeowner can take advantage of these to use their homes equity or to hasten the path to getting out from under the mortgage debt burden. A lower home refinancing rate will allow the borrower to either redo their loan for a shorter period of time, lowering the amount of interest to be repaid, or the home refinancing rate loan will allow for lower payments on a greater amount of loan when using the equity to increase the loan amount. It is a wise move for a homeowner to take advantage of lower rates to make a means to get out from under their debts, or to make strategic financial moves to invest in property that will pay off. Like the Proverbs 31 woman, who "considereth a field and buyeth it" (Proverbs 31:16), there is a time to buy and a time to sell. Taking advantage of these opportunities is a wise move to reduce debts overall, but the wise homeowner will consider the "field" before buying it. In other words, know the terms and conditions attached to home refinancing rates.

For more information: http://www.christianet.com/homerefinance

Equity Loans For A Modular Home

Equity loans for a modular home are loans that are granted to a borrower based on the equity in their current house. An equity loan for modular homes can have different interest rates and terms, depending on the lending company that a homeowner works with. There are many reasons that homeowners are looking for help in this area, and these reasons can span from financial troubles to vacation funding. There are many situations where these housing funds can be beneficial and save all homeowners money. To find what kind of things a homeowner may qualify for, they can browse the Internet where mortgage rates are advertised and lending agencies are looking for customers to work with that want help in this area.

A modular home equity is the financial difference between the amount owed on the house and what the market value of it is worth. For example, when a manufactured home has a market value of $100,000 and the homeowner owes $80,000 on the mortgage note, the equity is equal to $20,000. A homeowner can borrow money based on that information, and the equity loans for a modular home then becomes collateral for the equity loan for modular homes note. This is a second mortgage, and the house is at risk of repossession just as in the principal mortgage. When a lending company repossesses a house, then it is sold to pay off the debt, so if there is a default on equity loans for a modular home, the homeowner could be without their house.

There are a variety of equity loans for a modular home companies that will work with manufactured homeowners. Terms and interest rates for can vary depending upon the particular financial situation and the amount of investment in the home. Those looking for information will find that there are fixed rate loans available and there are adjustable rate loans available. Finding the right fit for individual needs can be accomplished online with the Internet.

The Internet is a wonderful place to inquire for more information about equity loan for modular homes companies who work with manufactured home lenders. There are hundreds of mortgage lenders advertising, and those looking for help can easily comparison shop and find good deals to negotiate from. Of course, a homeowner's personal credit report and history will have a vital impact on the interest rate extended in a contract. Using property value to borrow money can be a good and bad thing. Any debt that threatens your home or place of residence is risky. Those looking for help should carefully investigate these funds and review their own financial standing. Psalm 127:1 states,"Except the LORD build the house, they labour in vain that build it: except the LORD keep the city, the watchman waketh but in vain."

For more information: http://www.christianet.com/homeloans