However, there are many who cannot collect this required amount to be paid as down payment. To help them, there are a few ‘no down payment home loan’ options available. These loans especially cater to those who fall in the low to moderate income groups. It helps them purchase homes in the rural areas. We can say that these loans, help one overcome the obstacle of down payment, and fulfill their dream of purchasing a home.
Closed end home equity loans – it is a one time lump sum loan. You are offered a lump sum amount at the time of closing and cannot borrow further. These loans are offered at fixed rate of interest.
While both essentially represent a loan, the way you get the money differs. Deciding whether to apply for a home equity loan or a home equity line of credit depends a great deal on what you want to do with the money you get.
A HELOC is ideal to meet ongoing financial commitments such as monthly medical bills or tuition fees. Also, the interest paid on a HELOC is tax-deductible in most cases. Another reason that makes HELOCs so attractive is that there are no associated costs such as closing costs, check-writing fees and usage fees. You have to make a minimal payment each month, though you also have the option to repay as much of the credit line as you wish.
Mortgage brokers want to make mortgage loans to individuals because this is how they stay in business. Because the housing industry is pretty much at a standstill throughout the United States, many brokers are looking for creative ways to market mortgages to potential buyers. It is a buyer’s market because there are more homes for sale than there are people to buy them. The imbalance of supply versus demand has caused the home prices to drop in some areas, while some are still holding their own.