Home Equity

Home equity loans, lines of credit and second mortgages are all terms used to mean the same thing.   Basically, they are loans against your home that go in second lien position behind your primary or first mortgage.  These loans are designed to be a tool to give you access to money at a lower interest rate than you would normally get on a signature loan or credit card.

SPECIFICS

Closed End Second Mortgage
This type of second mortgage is not unlike the traditional first mortgage.  You get a fixed rate of interest for a finite period of time, usually 15, 20, or 30 years.  You take all of the money out at once and then it is paid back fully amortized over the life of the loan.  That means that at the end of that period you have paid the loan off in full.
 

HELOC - Home Equity Line of Credit
HELOC's are like a credit card that uses the equity in your home as collateral.  When you take out a HELOC, you are opening a credit line.  You make payments based on the amount of the line you have actually used.  They usually are adjustable rates that float with the Prime Rate and only require interest only payments.  This allows you to borrow money at good rates and keep the monthly payments low.  We have HELOC's that allow you to borrow up to 100% of the value of your home.  Interest rates are based on your credit scores, type of income used and the percentage you are borrowing vs. the value of your home.
 

Length of Loan
The credit line is usually open for 10 years - you may pay down the line or draw against it at any time and as frequently as you like during this period.  After the 10 year period and at the lender's discretion the line may be extended, converted into a 15 year amortizing loan, or paid in full.

Drawing Additional Funds
You will receive a checkbook and or a debit card (if you completed the debit card application) for future draws.  There is no fee to use the credit card or checks but there is a $300 minimum requirement per draw.

Loan Interest
Interest is calculated daily based on your current outstanding balance (not the available balance) and your current interest rate.  We only charge interest in order to keep your payment as low as possible and the interest you pay may be tax deductible.

Logistics
You will receive a monthly billing statement for your required payment.  This is an adjustable rate line of credit based on the Prime Rate.  You may pay extra principal at any time without penalty.  There is no pre-payment penalty for paying off the loan early. 
 

Old West Mortgage
1421 Broadway
Everett, WA  98201
(425) 252-1121
loans@oldwestmtg.com