Are you searching for a way to pull money out of your home and wondering if a 125 mortgage is right for your families needs? It starts with a little research and ends with some professional advice. 125 mortgages allow you to borrow up to 125% of the value of your home – more than it’s worth. To get a 125 mortgage you need a good credit rating but a lot of equity is not necessary.
One of the biggest aspect of 125 loans that we try to warn consumers about when choosing which company to go with for a 125 LTV loan is closing costs. Closing costs are an easy way to hide extra expenses in a 125% Home loan. The easiest way to figure out how much you will be really paying is look at the APR. This calculates both closing costs and interest. When you compare APRs you are comparing apples to apples with various lenders.
Common 125 LTV Questions
What are the risks involved in a 125 mortgage loan?
When home prices are on the rise, 125% home equity loans pose little threat. But if the housing market takes a sudden dip, those who accept 125% home equity loans will likely owe more than their homes are worth.
125% home equity loans are geared toward homeowners who need a large sum of money and so these loans are common among those attempting to start a business or are beneficial for homeowners embarking on major home improvement projects. Any high end purchase can be funded with this loan.
Many under handed lenders will offer 125% equity loans because it’s a win-win situation for the lender. If a homeowner defaults on the mortgage, the lender forecloses on the property. In most cases that wouldn’t really appeal to the lender. However, because the amount owed exceeded the home’s value, homeowners are obligated to pay mortgage lenders the difference.