Home > Home Loan Programs > Home Equity Loan

Alternatives to Home Equity Mortgage Programs

American Financial Resources does not currently offer home equity loans. Over the past few years, the loan loan-to-value parameters for HELOCs have become increasingly more conservative. Today, it may make more sense to consider doing a cash-out refinance on your primary mortgage. With an FHA loan, you may be able to pull cash-out up to 85% of the value of the property. This alternative can help you avoid the variable rate of a HELOC and the higher rate of a fixed rate second mortgage. AFR also offers FHA 203K home loan programs which allows borrowers to purchase or refinance a residence with funds allocated to rehabilitation projects. Call an AFR mortgage consultant to see if a cash-out refinance might be a solid solution for your home loan needs.

Types of Home Equity Mortgages

There are two types of home equity second mortgage:

• Home Equity Loan - Taken in a lump sum this loan is paid back in equal monthly installments of principal and interest payments over the term of the loan, commonly 15 or 20 years. Rates can be fixed or variable.
• Home Equity Line of Credit - This is a loan of revolving credit, much like a credit card, with a limit to the amount that can be borrowed. Monthly payments are made on the amount borrowed at that time, and the rate is almost always variable.

Give us a call today and we can help you analyze the pros and cons of a home equity loan and a cash-out refinance.