What Options Do You Have As A Property Owner When Money Gets Tight?
Wednesday, June 10, 2015, 6:00 AM | Leave Comment
Most people will find themselves in a tight financial situation at some point. When this happens to you, you may find yourself with minimal available cash to use for important needs. However, you may have equity available in your property that you can tap into. Essentially, you have assets available, but they are not liquid.
If you have found yourself in this type of situation, you do have a few options available to consider.
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A Cash-Out Refinance Loan
If you have equity available in your home and you have good credit, you may be able to apply for a cash-out refinance loan. This type of loan essentially will replace your first lien, and it may also replace your second lien if you have one.
Essentially, it can roll your mortgages into a single loan, restructure the debt into a different term and give you a new interest rate and mortgage payment. Most importantly, you could tap into the equity in your home.
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A Home Equity Loan
There are instances when a homeowner wants to keep his or her first lien in place. For example, if you have a great loan term and interest rate and you are comfortable with the existing mortgage payment, you may not want to change it.
A home equity loan is a second lien, and it will not take out the first lien. This can be a straight rate and term loan, or you can apply for a line of credit.
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A Hard Money Loan
If you have unique financing issues that make it difficult for you to qualify for a cash-out refinance loan or a home equity loan, a hard money loan is another option to consider.
This is a loan that is issued by a private lender, so the lender typically has the ability to be more creative with the financing structure and more lenient with the underwriting process.
Houston hard money lenders at Ellis Equity can close loans that some banks can’t complete. These loans often also close more quickly than the other options available to you.
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A Credit Card
Not all of your financing options may be linked to the equity in your home. You can also apply for a credit card. The available balance from the credit card may be used to help you pay for your expenses.
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Restructure Payments
If you believe that your monetary challenges will be long-term, you may consider restructuring your payments.
For example, if you recently took a pay cut at work, you may not be able to pay for all of your bills any longer.
Restructuring payments by working with your lenders may be a feasible option.
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Ask for Payment Plans
If you have large one-time bills that are causing you stress, you could establish them on a payment plan.
This option is particularly common for medical bills as well as different home service providers. You simply have to contact the company directly to request this option.
If you have equity in your home that you want or need to tap into, the good news is that you have several different options available to you.
You can begin exploring some of these options in greater detail today and getting quotes from different lenders as a first step toward obtaining the financing you need.
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