125 Second Mortgage Loans, also referred to as “No Equity” loans, are a means by which homeowners may borrow up to 125% of the current appraised value of their house. “No Equity” simply indicates that the consumer can borrow money even if they have no equity accumulated in their home. There are many lender programs available that will allow homeowners with or without home equity to quickly borrow up to 125% of their home’s value. Programs will allow the funds to be used to pay off high-interest credit card debt, pay for home improvements, tuition expenses, vacations, luxury items and just about anything else, as well as to simply obtain cash for any purpose. Second Mortgage loans have been an avenue by which hundreds of thousands of homeowners have been able to use to save money. In taking out a second mortgage loan or a debt consolidation loan, a borrower is able to combine the balances of their current debts and bills into one loan with one payment. Consumers with good to excellent credit have the ability to borrow up to 125% of the value of their current property
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General Overview for 125 Second Mortgages
There are many new homeowners who may not have accrued equity yet, find that a 125 Second Mortgage is a very convenient method to lower overall payments and consolidate debts incurred while financing/furnishing their new home.
As equity is the difference between the amount owed on a loan ad the current market value of the home or property, a “no equity” loan means that a consumer may take out a loan on a property even if there is no difference between the amount owed and the current property value. A high LTV no equity loan, often referred to as a 125 second mortgage or a 125 loan, simply means that the consumer may take out a loan up to 125% of the value of the property. No equity loans and more specifically high LTV loans are deemed somewhat riskier than lower LTV loans, and the rates are very sensitive to a consumer’s credit score. The money obtained from the no equity loan may be used for the purposes previously noted above.
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Sophisticated homeowners often take advantage of no equity loans / second mortgages to also consolidate their credit card debts and since a no equity loan is a second mortgage loan, interest may be tax-deductible. The tax-deduction along with the monthly savings adds up quickly to pay off debt and free up cash in a hurry. Consumers should note that a tax advisor should be consulted to establish interest deductibility.
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