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