Stated Income Mortgage
Stated income loans offer simplicity to the mortgage process with the convenience of less documentation than a traditional home loan. On the application, you simply state your income. If you have verifiable assets, confirmed employment and an acceptable credit score this mortage allows you to simplify the mortgage process, providing less documentation than usual. It may also be an option to consider if you are self-employed. The interest rates on stated income loans are generally higher than a fully documented loan because the lender is assuming more risk.
HELOC - Home Equity Line of Credit
A Home Equity Line of Credit is a designated amount of money that is available for you to borrow, secured by the equity you have in your home. You access your line of credit as needed and only make payments on the amount you have borrowed. You may pay an annual fee to maintain the line of credit and incur costs, such as an appraisal, application fee and recording fees, to establish the line of credit. Funds are accessed by simply writing a check. A home equity line of credit typically has more favorable rates than a credit card, but these rates vary monthly depending on the index used to set your rate. Your interest payment may be tax deductible.
Home Equity Loan With a closed-end second mortgage the interest rate is fixed and the amount of the loan is determined at the time of application. Borrowers typically use second mortgages to pay off credit card debts, high interest loans or private loans. A second mortgage differs from a home equity line of credit. When you secure a second mortgage, you receive all of the funds in a lump sum and your monthly payments remain the same throughout the length of the loan. With a home equity line of credit, you borrow the money as you need it and your monthly payments fluctuate because the interest rate is adjusted monthly and the amount you owe varies.
