Category Archives: You Can Do It!

Financing And Creative Financing; Deal The Cards!

Remember when, after years of debate with yourself about the advantages and disadvantages of owning a home, you made the ultimate decision to take a giant leap into the deep end of the home ownership pool? Yep, it was, and for many folks still is, one of the best financial moves you can make. You pay your loan payments and pretty soon after a few years of mortgage payments, you have a sizeable amount of equity. Equity amounting to the difference between what you still owe on your home and the current market value. Actually, since the real estate market is still enjoying a “hot streak” in many places in this country, in terms of low interest rates, your home may now have a high market value.

What is being pointed out here is that you and your home now have a “financial parachute” which is sort of a protective security blanket for those “just-in-case” happenings. Lenders like to call it home equity. Those same lenders are also quick to suggest you use some of that “hidden” money to, oh say, buy a cabin in the mountains, college education for your kids, a better car or just pay off those annoying credit card debts. That said, if you make the decision to borrow funds from your equity, you’ll have two choices: home equity line of credit (HELOC) or a home equity loan (HEL).

All this sounds so simple, right? Well, it can be if you’ve honored all your financial obligations to your current mortgage lender. But keep in mind that a home equity loan or line of credit isn’t free money. You’ll be assuming a new debt other than your first mortgage payment (it’s called a second mortgage) and you’ll be responsible for paying the home equity money back in the form of monthly payments. And if you default on either loan, you could be risking foreclosure. So be diligent and careful and know that you have the ability to make both payments and that you have made a wise decision.

If you don’t own a home or other property, think “creative financing.” This move is all about being able to get into property using other people’s money, not yours. In other words, since you have no money of your own, you find the “good real estate deals” and let all the other people bring money to the financing table.

For more information on how to fix your finances, contact Igor Cornelsen on Facebook!