Construction Mortgage

Homeowners have choices and can consider options to leverage their home equity. Depending on the product, these options may have slightly higher interest rates.

Private Mortgage

When homeowners cannot qualify for a mortgage to refinance through a bank mortgage debt consolidation or a home equity line of credit (HELOC), private mortgages may be an alternative. Since private mortgage lenders will secure a mortgage debt consolidation against a home, the interest is usually lower than high-interest debts like credit cards.

Private lenders usually charge a higher interest rate and fees than a bank, given the higher level of risk, however, this option still reduces interest costs over time. This is because these lenders understand that situations exist such as quick turnaround for financing, bad credit, stated income, and non-conventional properties.

Typically, private mortgages are shorter-term products and only require the interest portion to be repaid. Private lenders evaluate risk differently than traditional lenders and will consider the borrower’s ability to repay which is beneficial to self-employed and people with bad credit. Private lenders can also provide debt consolidation options through second mortgages.

Reverse Mortgage

An option available to homeowners 55 and older is reverse mortgages that provide access to the home’s equity without having to sell. Reverse mortgages allow homeowners to borrow up to 55% of the value of the home. The concept of this mortgage is essentially a reverse loan that means there are no payments required. Payments will be made either in monthly payments or in a lump sum payment to homeowners. Homeowners will pay the reverse mortgage loan when they move, sell or the last borrower dies. Typically, the interest rate is higher, and there are fees additional associated with reverse mortgages.

Debt Consolidation Mortgage

To understand if a debt consolidation mortgage or a HELOC could be suitable options to consolidate debts, and help get your life back on track, contact Square Capital Mortgage Brokerage. We understand each case is unique and there are many factors to consider including homeowners with bad credit or low income. Unlike traditional lenders like banks and financial institutions, with very strict lending terms, Square Capital works with over 50 lenders, including private lenders, to find the right solution for our clients. Our expert mortgage brokers and agents will help to find solutions to lower your monthly payment and reduce or stop the interest on your debt. Lower monthly payments every month reduces the chances of financial default while improving your credit and managing your money wisely.

Learn more about leveraging home equity for products such as mortgage refinance, home equity lines of credit (HELOC), and second mortgages.

Budget Planning and Expense Tracking

While products like debt consolidation mortgages, HELOCs, and private mortgages are tools to financial freedom, managing debt is the key to success. Practicing better money management in daily life like budgeting, monitoring spending, and saving. There are many free online apps that can support homeowners to achieve financial freedom and get better at managing money.