Once it is determined that you have enough equity in your
property, the next decision is how to get it out. If
you don't currently have a mortgage on your property, you
can access it with a first mortgage. Or, if you are
over 55 years of age, and you have at least 50% equity in
your property, you can do a reverse mortgage with a CHIP
program. (Please ask us about this).
already have a mortgage on your property, you may wish to
choose from either a second mortgage or a secured line of
credit. Both are actually mortgages. They just
have different terms and conditions.
With a second mortgage, a lump sum is given to you for the
purpose you require. Rates are usually slightly
higher than a first mortgage, and just like a first
mortgage, monthly mortgage payments are required.
The loan is secured by your property.
secured line of credit (called an LOC) is an open mortgage
with a credit limit. For example, you may be given a
$40,000 LOC. That means that you can take any amount
of money out of the LOC, up to 40K, and repay it with
either minimum monthly payments or make larger lump sum
payments. The bank will usually charge you around
the prime interest rate, plus or minus a few basis points.
just be aware that it is critical that you understand that
after the vacation is over, you will have a monthly
payment to make on the mortgage. Make sure you
budget for this expense.
you feel that you just need to get away, whether it be
Mexico, Disneyland, or just getting in the car for a
the money for this vacation could be right in front of
talk to us about this opportunity.