By Admin on Mar 18, 2009 in Other - Business & Finance
waddle02 asked:
Say the 2nd mortgage is substantially less than the value of the house. Let’s say the value of the house is at $300k, and the first mortgage (the one on the house) has $40K left. You take out a home equity of $20k. What happens if you default on the home equity, since they can not foreclose on your house since the value is much higher than the borrowed amount.
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Say the 2nd mortgage is substantially less than the value of the house. Let’s say the value of the house is at $300k, and the first mortgage (the one on the house) has $40K left. You take out a home equity of $20k. What happens if you default on the home equity, since they can not foreclose on your house since the value is much higher than the borrowed amount.
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Not sure I understand the question being asked . . . however, if the mortage (lst) is only 40 K left on principal and the home equity lein is 20 K . . . I would wonder why you don’t pay off the mortgage and increase the Home Equity lein to (say) 100 K if you require some more funds for now . . . surely any bank would offer you 25% of the value of the property as a Home Equity Line of Credit (HELOC) . .
HELOC’s are far better than a mortgage ~ one pays less interest in the long haul and the debt disappears quicker as well.
Brenda M | Mar 19, 2009 | Reply