We provide equity loans on all types of property. Equity loans, sometimes referred to as a "Cash out refinance", can be a good solution for anything from handling home improvement projects to using them to eliminate other personal debt, including car loans and credit card debt.
If you have any question about it, you might want to consult your CPA, but in most cases the interest on a home equity loan is tax deductible. Therefore, if you can take "non deductible" interest that you are paying on a debt, and turn it into " tax deductible interest" it probably makes sense to do. The other thing to consider is that if you are paying off non-recurring debt, like credit card debt, and you can use it to "stop the bleeding" that the insane interest rates the credit card companies charge, then it also makes sense to do. By stopping the bleeding, and turning it into interest you can deduct, you'll spend a lot less money over the years, and use the difference to pay off your house that much faster by pre-paying your loan. The numbers can be amazing once you put a pencil to it.
One important thing to keep in mind is that the rates on equity loans, or cash out refinances, are always higher than regular purchase or re-finance rates. The market and the type of loan program you are looking for will help determine how much higher, but typically anywhere from half a point to two points higher. This is why you want to look at all options before deciding on an equity loan.
Since equity loans are a different sort of animal, there are different ways to approach it. Your individual situation will actually determine which way it makes sense for you to go. There are a number of important factors that will help determine the best direction with an equity loan. These include but are not limited to how much longer you plan to own the home, your personal cash flow position, and other debt that you are looking to eliminate with the home equity loan. All of these things need to be considered in the process of choosing a home equity loan.
Currently in Texas, with acceptable credit and good mortgage payment history, you can usually borrow up to 80% of the value of your property value on your home or second home, and up to 90% on an investment property, providing it is a residence. Remember that these loans have to be in first position, which means that any existing lien you currently have on the property will be paid off and replaced with the home equity loan.
On commercial property, the typical equity loan limits are in the neighborhood of 70% to 75% of the current property value, and may vary significantly due to the type of property, as well as the financial health of the business.
Last but not least, there is no such thing as a free lunch, and there is no such thing as a free loan. When you see something advertised as having "no closing costs", just remember it does not mean that you aren't paying anything just because you can't see it. On these "no costs" deals, you are paying it in the form of a higher interest rate. However, depending on your individual situation and what it's going to do for you, it still may make the most financial sense in the long run. Just remember, check out all your options, then make your decision.
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