Florida Home Equity Loans
From Davie (33328) to Tallahassee (32305); Florida homeowners are taping into their home’s equity to finance a variety of projects. Traditional second mortgage products are home equity loans and home equity lines of credit (HELOC) and both products allow Florida homeowners to use up to 80% of their home’s loan-to-value to fund initiatives such as home improvement, debt consolidation or even auto financing.
For those who need a lump sum of money to make a one time payment, a home equity loan is the best option. One example is for debt consolidation. The borrower can pay off debt to several creditors using the home equity loan; then have only one monthly payment at, typically, a lower rate. Home equity loan rates are fixed and provide stability and repayment certainty.
However, if the borrower plans to use the money to fund a project that will continue for a period of time, a home equity line of credit (HELOC) should be considered. While HELOC rates are typically lower than home equity loans, HELOC rates are variable. Also, because it is a revolving line of credit, HELOC borrowers only repay the amount of money drawn against the line.
Another home equity option in Florida is cash-out refinancing. Cash-out refinancing allows the borrower to replace an existing mortgage with a new mortgage for a higher amount. The borrower pays off the original mortgage using the new loan and the resulting difference becomes the borrower’s home equity loan. Florida homeowners typically turn to the cash-out option to refinance their homes and tackle a new project such as home improvement.