Has A Decade of Healing Housing Markets Created Opportunity for You?

Has A Decade of Healing Housing Markets

Created Opportunity for You?

It's now been well over a decade since the big housing

market crash ... 

 

While it's true that recently many housing markets

have cooled, a recent Home Equity Report from  CoreLogic states, "Homeowners Gained Over 3.2 Trillion in Home Equity in 2021".  

This report clearly shows ...

a momentous healing has taken place in the housing market.

The report goes on to state, 

"Soaring home prices over the past year boosted home equity wealth to new highs through Q4 2021. The amount of equity in mortgaged real estate increased by more than $3.2 trillion in Q4 2021, an annual increase of 29.3%, according to CoreLogic. The average annual gain in equity was $55,300 per borrower, more than two times the gain from a year earlier" 

Given that news, many homeowners are now wondering ... 

• Has the healing that has taken place also affected me?
• Am I sitting on untapped home equity?
• How can I best utilize that home equity to my financial advantage? 

I'm constantly receiving inquiries from homeowners regarding their equity standing.  There's a direct correlation between the equity they hold and the financial options available to them moving forward.  

The questions they ask typically revolve around these topics:

• Debt Consolidation:  Existing debt is paid off via a new loan, creating one loan with one singular large debt versus multiple loans with small balances.  
• Student Loan/Credit Card Payoffs:  Borrowers hope to pay off or reduce balances on credit cards with double-digit interest rates or on high balance Student Loans that seemingly last forever.  (This is a topic that borrowers need to pay close attention, given Pandemic relief measures taken over the last couple of years ... and the possibility of Student Loan forgiveness now being on the table)
• HELOCS:  A HELOC (Home Equity Line of Credit) they hold has come due or is coming due soon.  What options are currently held, given the equity in their home? 
• Reducing Mortgage Term:  Borrowers wish to reduce their terms from their current mortgage, going from 30-year Fixed to 15 or 20-year loan terms.  The benefit being that debt is paid down faster and borrowers possibly position themselves more advantageously for the future.

A majority of housing markets across the U.S. have experienced market appreciation.  But the following questions must be answered:

• Are elevated housing prices alone enough to allow the homeowner to borrow on their property again?  
• Can they erase the debt that carries higher rates of interest? 
• Can they ease the financial pressures that drain their monthly cash flow?
• Can they eliminate the debt that has proven hard or impossible to pay off or pay down?   

The answer is:  Yes ... No ... and Maybe ...  

For homeowners that bought or refinanced their homes

within the last 10 years and find themselves carrying an

interest rate below 5%, there may be financing options to

consider.  

Those options might include:

• A Second Mortgage:  A Second Mortgage uses any equity available in your home as security against the first mortgage.  A lien is placed on your property which is subordinate to the first mortgage.  Second Mortgages typically have higher interest rates than first mortgages. 
• A Home Equity Line of Credit (HELOC):  Keeping your current low-interest rate mortgage and not pursuing a Refinance may be the better option for you to take. 

    (And yes, this is the very same type of loan mentioned

above as something some borrowers may wish to eliminate.

But just as the HELOC made sense for them at the time they

initiated it, a HELOC may make sense for some borrowers

now.)

• Cash-Out Refinance Loan:  This is a loan where you finance a new mortgage for more than your existing mortgage balance and then pay off the existing mortgage.   You get a check for the difference, or that same excess money is directed from the closing to pay off Creditors and balances owed to them.      

For many reasons, a Cash-Out Refinance may be the

perfect financing solution you seek.   In cases where a Cash-

Out Refinance is sought, an appraisal will be performed. An appraiser will determine the Current Value of the property and reveal the equity held.

Typically, 80% of that property value is available to be

borrowed, whether it be ONE loan or a combination of First

Mortgage - Second Mortgage - HELOC.  

Jointly they must not equal more than 80%* of the Appraised Value.  (* FHA and VA cash-out refinance allow higher Loan To Value Ratios, where qualified.)

Ultimately, the answer and

solution sought is a very personal one ... one that should be based and made solely on YOUR personal finances and goals, no one else's.  There simply is no broad "one-size-fits-all" answer.  

So you ask ... 

• How do you discover if equity exists in your home?
• HOW do you go about reaching that financially sound conclusion?  
• How do you proceed?

In order to find an answer and the financing option

that serves your personal needs best, you need to reach out to

an experienced Loan Officer. Only through a complete and thorough review of your credit and finances can you discover if any advantageous financial solutions exist. 

With the help and guidance of your Loan Officer,

comparisons between the options revealed through this

process will be weighed ... and the pros and cons of each

deliberated. 

Then and only then can you make an intelligent informed

decision.  A financial review is needed in order to find the answer you're searching for and well worth it.   

Why?

1. Peace of Mind.  Should you decide to move forward with new financing, you then do so knowing that you have considered all the avenues open to you.  You have chosen the form of financing that will fulfill both your short-term needs and long-term goals. 
2. Monetary stress relief.  If equity is available, pending approval, funds to tackle needed and desired household repairs and improvements may be tapped.  

No matter your end goal, your equity, and money will be working hard on your behalf for a better financial future.

In the Chicagoland area - Illinois - Wisconsin, reach

out to me with your questions.  I'll be happy to hear from you

and assist you in reaching your goals.  

Are you hoping to Construct, Buy, Refinance or Purchase a home or investment property in Chicagoland or somewhere else in Illinois or Wisconsin?

Looking for mortgage financing answers, options, solutions, and experienced assistance?  
Contact me! I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.

I'm easily found at:

Gene Mundt

Mortgage Originator -NMLS #216987 - IL Lic. 031.0006220 - WI License #216987

American Portfolio Mortgage Corp

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

www.genemundt.com

gmundt@goapmc.com

   

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:

The Lincoln-Way Area, Will County, (New Lenox, Frankfort,

Mokena, Manhattan, Frankfort Square, Joliet, Shorewood, Elwood, Lockport, Wilmington, Crest Hill, Symerton, Braidwood, Channahon, University Park, Beecher, Plainfield, Bolingbrook, Romeoville, Tinley Park, Homer Glen, Crete, Peotone, Naperville, etc.), DuPage County, Kane County, Grundy County, the City of Chicago, Cook County, and elsewhere within IL & WI.

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