Los Angeles Construction

Los Angeles Construction Loans

If you are planning to let's say do a home addition in Los Angeles, a home equity loan allows you to borrow money in a lump sum against the equity (the value of your home subtract what you owe) you have built up in your home. This loan is subordinate to the existing first mortgage.

Buyers commonly use a second mortgage to keep their first mortgage in a compliance range (which keeps the rate lower) and to avoid PMI. Home equity loans are often used to pay for larger renovations to your home.

A home equity loan is usually a fixed rate for a set period of time. A home equity line of credit is usually a variable rate for a varied period of time. 

While both are considered second mortgages, the advantage of a home equity loan is that all capital will be paid to you at closing.

A home equity loan has a fixed monthly payment while a line of credit usually has just a minimum monthly payment of $100 and a variable amount of time to pay off the initial draw. Like the line of credit, a home equity loan is tax deductible for loan amounts up to or equal to 100% of your home's value.

In most cases, home equity loans or lines of credit do not require a complete appraisal. Actually for most loan amounts of $250,000 or less, the appraisal process can be completed electronically. Because you don't require a formal appraisal, home equity loans and lines of credit can be coordinated to close quickly. Once again the advantage of a home equity loan for Los Angeles construction for Los Angeles home addition loans is that this strategy gives you the money you desire directly to you with monthly payments.