Q: Now that our home has appreciated some, my wife and I are considering tapping our increased equity to pay down some credit card debt. Should we get a home equity loan or HELOC? Are they the same thing? Casey, Roswell, GA A: Good question. Home equity loans and HELOCs are similar but they are not the same. Both home equity loans and HELOCs are types of secondary mortgages on a home, however, a home equity loan has a fixed interest rate, fixed loan amount and a fixed repayment schedule. On the other hand, a HELOC, which stands for a home equity line of credit operates like a credit card by offering a variable interest rate that allows you to […]
continue reading Q: Do you think we will avoid another mortgage crisis now because subprime lending isn’t so high like it was before the last financial crisis? Chad, Mendham, NJ A: Chad, there were many factors that contributed to the mortgage crisis of the last decade, one of the biggest, of course, being the creation of questionable mortgage backed securities, where one security instrument was divided into pieces and then sold separately to investors. But now a decade after it began, the Great Recession is now commonly blamed on a subprime mortgage crisis. The prevailing subprime crisis narrative is that the supply of credit to low-income households fueled increasing house prices, and was responsible for the crash. Narratives can be very persuasive […]
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