Home Equity Loan To Cash Out Your Property Mortgage

Every one can run into tight cash flow situations every once in a while. It may be because of the lure on better yields on other investments, working capital crunch for their businesses, or even some unique personal issues that require a huge financial injection.

It is perhaps a little surprising that there is still a segment of home owners who are not aware that there is such a thing as a home equity loan. A home equity loan allows you to take up a term loan against property at existing Singapore mortgage rates. This means that a loan structured in this way will allow you to enjoy low interest rates if the existing mortgage rates are much lower than personal loan rate, business loan rates, car loan rates, etc.

The loan amount that you can qualify for depends on the property value and your personal income. Needless to say, you cannot expect to obtain a $800,000 term loan if your property value is $800,000. And you also cannot expect a loan quantum that your personal income cannot support. Lending banks are the best in assessing risks. It is very unlikely that a home equity loan can be offered if they have determined that you cannot afford to promptly service it over the years.

The most common reason for home owners to take up a home equity loan is for the purpose of investment. Investment opportunities with great returns have come up and these home owners take up term loans against their properties to exploit the opportunities. If an equity loan has an interest rate of 1% while the prospective investment will yield 7% returns, it does not take a genius to figure out how to make the most of that opportunity.

Like all mortgage loans, it can pay off for you in a very big way if you spend quality time reviewing what each bank can offer you. Property valuations, loan to value, mortgage interest rates, etc, will vary from bank to bank. You need all available information to make a good suitable decision on a home equity loan. If you rather sit back and relax, contact us from the mortgage loan Singapore home page and let us handle all the hassle for you for free.