| A 125% home equity loan (also known as no | | | | lower rates than credit cards and personal |
| equity loans, 125 home equity loans and 125 | | | | loans, and it may also provide substantial |
| loans) is a second mortgage that requires no | | | | tax benefits. When used wisely, 125 home |
| equity but the loan allows you to borrow up | | | | equity loans can be a relatively low-cost way |
| to 125% more than the current combined loan | | | | to borrow money for big expenses and debt |
| to value (CLTV) ratio of your home. The CLTV | | | | consolidation.125% home equity loans are for |
| is the proportion of more than one loan | | | | those who plan to stay in their home until |
| secured by your home in relation to its | | | | their property value increases significantly |
| value. This is different than loan to value | | | | because the home cannot be sold unless the |
| (LTV), which only involves the proportion of | | | | home equity loan is paid off in addition to |
| a single loan in relation to its | | | | the first mortgage. Also, because lenders |
| value.Wikipedia provides these examples to | | | | face a higher risk of default due to there |
| help people understand the difference between | | | | being no equity in the home, the interest |
| LTV and CLTV:Loan To Value: | | | | rates are higher than those of a conventional |
| | | | home equity loan.125% home equity loans |
| Property valued at $200,000.00 | | | | typically require that the borrower has good |
| | | | credit. However, even if your credit is less |
| 1st mortgage = $180,000.00 | | | | than perfect, you may still be able to |
| | | | qualify for a 125% home equity loan. If not, |
| LTV = 90%Combined Loan To Value: | | | | you may want to consider mortgage refinancing |
| | | | or a standard second mortgage loan once your |
| Property valued at $200,000.00 | | | | FICO credit scores improve.Maria Ny, a |
| | | | free-lance writer from California, is highly |
| 1st mortgage = $180,000.00 | | | | respected for her published articles that |
| | | | covered a broad range of subjects ranging |
| 2nd mortgage = $45,000.00 | | | | from Home Equity, Debt Consolidation, |
| | | | Bankruptcy Reform, Credit Repair to Real |
| $225,000 Total mortgage balance | | | | estate Financing. Check out her helpful |
| | | | articles online at Second Mortgage & Home |
| CLTV = 112.5%125% loans are generally fixed | | | | Equity Loans Nationwide.You can learn more |
| interest rate installment loans, and they are | | | | about debt consolidation and home improvement |
| particularly popular among first time home | | | | financing for first time homebuyers and get |
| buyers who don't yet have equity in their | | | | specific loan program parameters. Get a free |
| homes for debt consolidation, making home | | | | loan quote for a 125% Second Mortgage that |
| improvements, buying furniture, landscaping, | | | | requires no equity. We recommend that you |
| consolidation of auto loans, personal loans | | | | get more details about the guidelines for |
| and other high-interest loans, paying medical | | | | Fixed Rate No Equity Home Loans because it |
| expenses and college tuition. 125 loans may | | | | could help lower your monthly payments by |
| also be used for mortgage refinancing of a | | | | lowering the adjustable interest rates on |
| current second mortgage.Even with rising | | | | credit cards. |
| interest rates, a 125% loan offers borrowers | | | | |