Home Equity Loan

What is a Home Equity Loan?

A Home Equity Loan is ideal for homeowners seeking additional funds, whether for home improvements, debt consolidation, or other major expenses.

A Home Equity Loan allows homeowners to borrow against the equity they’ve accumulated in their homes. This type of loan offers a fixed interest rate, in sharp contrast to HELOCs which have variable interest rates that are tied to Prime Rate.

A fixed rate means that your rate and your payment will never change – giving you the predictability that responsible homeowners count on.

Your Home Equity Loan will sit in second position behind your 1st mortgage – so there is no need to give up that low rate you have on your 1st mortgage!

So, if you’re contemplating a major home renovation or consolidating high-interest debts, a JVM Home Equity Loan might be the ideal choice.

Why Choose JVM’s Home Equity Loan Over a HELOC?

When weighing the options between a Home Equity Loan and a Home Equity Line of Credit (HELOC), one standout advantage of JVM’s Home Equity Loan is its fixed interest rate, as we mentioned above.

HELOCs come with variable rates that fluctuate over time, as we have seen in recent years when HELOC rates shot up over 5%! JVM’s Home Equity Loan offers stability and predictability in your monthly payments. This means you won’t be caught off guard by sudden spikes in interest, allowing for better budgeting and financial planning. Furthermore, the certainty of a fixed rate can provide peace of mind, especially in an unpredictable economic environment.

There are several compelling reasons to consider a Home Equity Loan with JVM Lending:

• Fixed Interest Rate: Enjoy the stability and predictability of consistent monthly payments, regardless of market fluctuations.
• Debt Consolidation: Combine multiple high-interest debts into one with a single payment with potential tax benefits to boot.
• Home Improvements: Boost your home’s value by financing significant upgrades or repairs.
• Major Expenses: Address unexpected costs, such as tuition fees or medical bills.
• Investment Opportunities: Use the equity in your home for promising investment ventures.

Loan Requirements

Eligibility for a JVM Home Equity Loan is based on:

1. Equity: You need to have at least a 10% equity cushion once your Home Equity Loan is in place.
2. Credit Score: You need a minimum credit score of 680.
3. Debt-to-Income Ratio: Your total monthly debt and housing obligations cannot exceed 45% of your gross monthly income.
4. Property Type: Eligible properties include Single Family Residence, Condo, PUD, and Site Condo.

JVM’s Home Equity Loan Terms

• Options for 10-year fixed rates and 20-year fixed rates are available, catering to various financial needs and repayment capabilities.
• Home Equity Loans are standalone and don’t permit piggyback transactions.
• Full appraisals are mandatory.
• The product adheres to Fannie Mae guidelines, with some variations in documentation and guidelines.
• State-specific restrictions apply.
• Interest rates vary depending on equity and credit scores.

Pros & Cons of a Home Equity Loan

Pros:

1. Fixed Interest Rate: Benefit from consistent monthly payments with a Home Equity Loan.
2. Lump Sum Payment: Access funds immediately for your needs.
3. Potential Tax Benefits: Interest on a Home Equity Loan might be tax-deductible (always consult a tax advisor).
4. Flexibility: Use the funds as you see fit, from home renovations to investments.

Cons:

1. Closing Costs: Fees may be associated with Home Equity Loans.
2. Potential Debt Accumulation: If not managed wisely, you could accumulate more debt.

If you are concerned about either of the Cons listed above, we recommend talking with one of our mortgage experts. They can help review your full financial profile and advise you on the best path forward.

JVM’s Home Equity Loan Guidelines

Considering a Home Equity Loan with JVM? Here’s a straightforward breakdown of what you need to know.

NOTE: As of now, JVM’s Home Equity Loans are not available within the state of Texas. Please contact JVM Lending for alternatives.

APPRAISALS

Before getting the loan, a full appraisal of your property is required. This means a professional will assess the value of your home to determine how much can be loaned.

UNDERWRITING: INCOME, ASSETS, AND CREDIT

Your loan will be manually reviewed based on Fannie Mae guidelines. This means a person, rather than a computer system, will evaluate your financial details. Some specifics they’ll look at include:

ELIGIBLE PROPERTY TYPES

Your property type must be one of the following:

• Single Family Residence: A standalone home for one family.
• Condo: A unit in a multi-unit property.
• PUD (Planned Unit Development): A community of homes with shared amenities.
• Site Condo: A standalone condo, similar to a Single Family Residence but in a condo association.

TITLE INSURANCE

When getting a Home Equity Loan, you’ll need title insurance to confirm you’re the clear owner of your home. There are three main types:

1. Property Report with Insurance Wrapper: A cost-effective option.
2. ALTA Junior Loan Policy: A basic title insurance.
3. ALTA Loan Policy: Comprehensive title insurance.

HOMEOWNER’S INSURANCE

You must show proof that your home is insured. Don’t worry; you won’t need to increase your coverage just because you’re getting this loan.

PROPERTY TAXES

Ensure your property taxes aren’t overdue by more than 60 days when closing the loan. If they are, you’ll need to show you’ve paid them or settle them before finalizing the loan.

CREDIT SCORE AND REPORT

• JVM will check your credit score. If there are multiple scores, the middle or the lower one will be used.
• If there’s more than one person applying for the loan, the lowest score among the applicants will be considered.

PROPERTY FINANCING RESTRICTIONS

Before closing, any other debts or liens against your property, except for your primary mortgage, must be paid off. Also, certain types of primary mortgages, like those with balloon payments due soon or reverse mortgages, might affect your eligibility.

MINIMUM TRADELINES

This refers to your credit accounts or “tradelines.” At least one person applying for the loan should have a good credit history, based on accounts they’re responsible for.

Key Steps to Closing Your JVM Home Equity Loan

STEP #1: Initial Consultation

Discuss your needs with a JVM Lending mortgage expert. Schedule a call with us here: Talk To A JVM Mortgage Expert

STEP #2: Complete Your Loan Application & Collect Documentation

Complete JVM’s loan application and necessary paperwork and provide relevant financial documents.

STEP #3: Property Appraisal

We will have an appraiser visit your home to determine your home’s current market value.

STEP #4: Loan Approval & Locking In Your Interest Rate

Upon loan approval, you’ll be presented with the interest rates and terms.

STEP #5: Funds Disbursement & Closing Your Loan: Once you’ve reviewed and sign all documents, we will close your loan and you’ll receive your loan in a lump sum amount.

Is a JVM Home Equity Loan Right for You?

Every homeowner’s situation is unique. To determine if a JVM Home Equity Loan aligns with your financial goals, consult with one of our mortgage experts at (855) 855-4491 or [email protected]. We can provide a comprehensive equity analysis, answer questions, and guide you through the process. Let’s get started!

If you’d like to get in touch with a JVM expert directly, please contact Heidi Ameli at [email protected] or call (925) 331-8310.