No Equity Home Loans or No Equity HELOCs are second mortgage loans that are offered to consumers, who have no equity in their homes. Having no equity in your home means that your mortgage loan is larger than your home’s value. For example, if your home is worth $85,000 and your mortgage loan is $90,000 then you have a negative equity in the amount of $5,000. You can get up to a 125% LTV No Equity Loan to take $16,250 out of your home.

Some seniors seem to think, that the lender can get the ownership from the borrower. This is not true. The reverse mortgages are like whatever loans, which have certain guarantees. Only if a senior does not take care about the insurances and the property taxes, the lender can force to sell the property to be able to get his share.

When you use your home equity for a debt consolidation loan, you need to ask some important questions. The first one is to ask what the interest rate will be. Ask if this rate will change during the course of the loan. If the answer is yes, find out how often and by how much. You do not want the rate to be increased every six months for the next 10 years.

Build savings – Hold other expenses and save money left over from your income so as not to go on loan again. Save money to repay the loan you borrowed with the interest fee.

To make selling a home even tougher the seller assisted down payment programs were outlawed recently. Down payments for FHA insured will increase from 2.85% to 3.5%. Every tenth of one percent increase in the required down payment blocks tens of thousands from buying a home.

Knowing how your payment structure changes along the loan tenure is extremely important to your financial planning. It can change from fixed to floating, which may result in a hike for your monthly payments. It can also slowly evolve from a purely interest payment to a mixture of principle and interest. All these factors might cause a shock to the consumer if he or she is unaware of the evolving of the housing loan plan.

It is also very important for borrowers to know that right documents to submit. Ask your lender about the required documentations. Lenders typically require borrowers to submit asset documents and proof of income history.