Home Equity is Key for Borrowers Seeking Cash Out Loans or Refinancing Lines of Credit
The survey cited a retiring couple and asked them if it would be wise to use a 2nd mortgage or refinance loan to consolidate credit card debt. However, depending on their future plans and expected financial situation, there may be various mortgage solutions that, in fact, help them manage and achieve their changing financial goals. The home equity study was conducted in October, 2006, by Harris Interactive(R) by the request of Countrywide Home Loans, Inc.
While many homeowners micro-manage their investments, many are not using their home mortgages as a practical financial tool. Many Americans believe that they are fixed to their original loan and miscalculate their ability to refinance their existing mortgage let alone add a new home equity loan for reducing debt or financing home improvements. The survey indicates that many of these Americans may consider their mortgage as lifelong debt, rather than a financial tool. Dan Hanson, managing director of Countrywide Home Loans stated that, "There's a prevalent misperception about mortgages that may prevent many Americans from realizing their home's full financial potential."
There will always be some homeowners who refuse to consider their home's security as a financing tool for taking out home equity loans and credit lines. The study concluded that "6 out of 10 homeowners would consider tapping equity as a source of funds and 70% of those say they would use the money for home improvements." "There is a sense that many people are pulling cash out of their homes to pay for luxury items, but our survey found the opposite to be true," said Hanson. "In fact, most Americans are quite conservative and do not want to be heavily leveraged. While that is a positive trait, it also showed us that there is still room to educate homeowners about ways to make their home's financing work to their greatest advantage."
Related Tags: home equity loans, heloc, home equity line of credit, second mortgages, home equity rates, fixed rates
Art is one of the most respected mortgage finance writers published on the internet. When Art isn't hiking through the Costa Rican jungles to surf perfect waves, you will find him typing away in a quaint coffee shop somewhere between Los Angeles and San Diego. To learn more about today's interest rates for purchase mortgages, refinance and home equity loan programs, please visit, Home Equity Credit Lines. Art suggests visiting the loan assistance center at Nationwide Mortgages and learn more about the direction of the market for Home Equity Loans and Second Mortgages. Smart Home Equity recommends you get to know the wide variety of loan programs available can enable both prospective home buyers and existing homeowners to better manage their mortgage to fit their goals and financial situation.
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