Video: Using Your Home for Collateral
Thursday Sep 01st, 2022
Using Your Home for Collateral
Is using your home for collateral on a loan a good idea? Well, before you think about refinancing, taking out a second mortgage or a home equity loan, consider your options.
Talk to an attorney or financial advisor before making any decisions about borrowing money using your home as collateral.
High-interest rates and credit costs can make it very expensive to borrow money, and loan costs can vary greatly – so it’s in your best interest to research what types of loans you would qualify for.
Most creditors will give you a written, good faith estimate showing the charges and fees you would pay at closing, the monthly payment, the annual percentage rate, and other loan terms. This helps you compare various loan options.
Keep in mind, if you use your home for collateral on a loan and can’t make the payments in the future, you could lose your home as well as any equity you might have built up… so make sure you can afford the loan before making a decision.