125% Mortgage Loans at Cleveland Ohio Mortgage
Definition – A 125% mortgage loan is a home loan that allows you to pull out cash to 125% of what your home is worth. This can be done two ways. In most cases you will have to refinance your current mortgage and take a 90/35 meaning the first loan is 90% LTV and the second is 35%. However, there are some lenders that do just a second mortgage to 125% LTV. Some lenders offer a 115% LTV loan instead of 125%.
Advantages - This type of loan is only good when you need the cash very badly. You must also be able to pay it back within due time or you will never have any equity in your house. Another time a 125% LTV loan comes in handy is when you are doing home improvements that will raise the value of the home significantly. Your improvements should bring the value of your house up enough that you will not be at 125% loan to value when you are done.
Disadvantages - Most of the time the rates on these loans are really ugly and you will be on a 2-year adjustable rate mortgage (ARM). The loan will be fixed for 2 yrs and then it will adjust. This means you should try to have your loan to value back down to 100% by the time you refinance so you do not have to go back into a loan above 100%. This is very important, please do not overlook this when you are getting yourself into a 125% mortgage loan.
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Here are some of the areas in Ohio where we do 125% mortgage loans: Canton, Cincinnati, Columbus, Cleveland, Akron, Toledo, Dayton, Hamilton, Lima and Youngstown |
