Easy Home Equity Loan » home equity

Why don't banks just issue 2 year bonds to borrow home equity at a decent interest rate?

admin — Thu, 29 Dec 2011 01:14:47 +0000

If a bank is having trouble with their asset column, why doesn’t a bank just issue 2 year bonds to borrow home equity from property owners at a decent interest rate? In other words, if a property owner has bad credit and does not qualify for a loan, why doesn’t a bank just give the property owner a 2 year bond (similar to a cd) at a 2 year cd interest rate and temporarily transfer the property owners equity into the asset column of the bank? The bank would then have additional assets in the asset column (to balance) and the property owner would get an interest rate on their home equity? (The amount borrowed by the bank would be only a fraction of the property owners home equity which would be insured only to 100,000, in agreement during the 2 year period that the homeowner would agree not to sale the property, pay taxes, etc. There could possibly even be an option to have the interest rate on return set to slowly cancel out some of the property owners personal debt. Foreign banks could do this to slow the rate of loss by shifting the time, similar to operation twist, but instead of using treasuries you would create a new bond and "twist" home equity.)

I am very new to banking concepts, does this form of bond already exist?
Thanks JoeyV, I need to make some mistakes now, I’m still new to this.
1) Yes, that’s where the "twist" would come in, in terms of the bond. The bank would issue a special kind of bond that the property owner can basically sell back to the bank (its in reverse, of course the interest rate will be that of a cd based upon the amount of equity agreed upon in the transaction).
2) This new type of bond could also be a special kind of deed that is made that shows temporary joint ownership during that period, with certain limitations in the contract. The bank can only use the equity of the property as a security. This could be made into a piece of paper with a notary seal of some sort and a few signatures on it.
3) The bank would actually temporarily be joint owner of the property (in terms of equity). It would be preferably best due to this if the property owner was preferably sub-prime, as the property owner would be unable to make a loan from that particular bank for the duration of the
…duration of the bond (due to a conflict of interest). I don’t know if this would work, but during the transaction, the money would actually be rotated from nothing in the asset column to a deposit in the liability column, insured, and back into the asset column to loan… all in terms of numbers, from nothing. (of course the real value being in the property and other loans made, not to mention other investments, r/mbs etc).
4) Well the "twist" in operation twist seems to me to be a twisting of the actual structure of the previous QE. In QE 1, 2 American banks were unable to make loans due to the credit crisis, it seemed they couldn’t make money off of federal bonds made from nothing unless they made sub-prime loans. So in terms of actual assets the banks had to hold properties (usually acquired through subprime lending) in the asset column in order to balance it, which lead to the mortgage crisis. In QE 1, 2 it seemed they simply took the money made out of nothing that American bank
…that American banks weren’t using, called the it a stimulus, then dropped this package of money made out of nothing on foreign banks for assistance. (I don’t know how it all exactly works yet, but I think after it was all over the properties from failed banks were just rebundled up and sold through investment banks.)
4) So it seems to me, in QE 3, the "twist" is that instead of unloading money made out of nothing on foreign banks, they shuffle the treasuries and simply twist the yield curve in terms of interest rates, in terms of time.
5) It seems if there is real value in home equity in failing countries, and the banks and property owners are not making money off it, it would kind of make sense to twist time and utilize it. In terms of failing countries though, it kind of sounds more like something the World Bank might do, that in providing interest on owned equity to those countries they provide base money for the people to buy basic supplies, meanwhile reloaning the money in the
…the money in the countries equity back to them in order to give property value, build and mobilize infrastructure.

I really appreciate your reply, have to do more research on it, the idea just came to me off the top of my head, so its nice to have some imput on it.

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When buying a second home, should I use home equity or take out a mortgage?

admin — Mon, 29 Aug 2011 06:38:35 +0000

purchasing a very affordable fix’r up. Can afford to use home equity (prime) but is there a benefit to mortgaging some of the cost?

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Can I get a second mortgage?

admin — Sun, 28 Aug 2011 06:43:29 +0000

I’m writing a book. One of my characters (a single mother of two) owns a house for 000 (with an annual salary of 000. One day, she gets in an accident and is paralyzed waist down. What would happen to her house? If all the money goes to her medical bills and what not? Her daughter will drop out of college and begin to work (she’s 18). Will the home equity be tapped dry? What does that even mean?

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Home equity loan if my minor's son name is on the title?

admin — Mon, 20 Jun 2011 14:54:04 +0000

If my minor’s son’s name is on the title, can I apply for a home equity? How can I sell the house? Do I need approval of my Son’s Mom. We are divorced and live in Philadelphia.

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Financially strapped. Having creditors calling. WHere can I turn for help/advise?

admin — Sun, 15 May 2011 15:39:27 +0000

I’ve always had very good credit score. 11/2007 was 725. Today it’s 680 and going down (I’m sure). Owe about 43000 in credit cards, have 2 mortgages and 2 401k loans. All taken to put children through college and help with their finances. Was doing will however over the past 10 months, 2 of the children lost their jobs and now I’m in financial trouble.The creditors are constantly calling, I’m only late by 2 wks, however do not see a way to now pay for 2 months and late fees too, pluse interest rate was jacked up. This is a nightmare, depressing and embarrassing. I need some help/advice as to what are my options. Tried Home Equity but qualify for high interest which only buys me a little time before I’ll be back in trouble again. I just can’t make ends meet anymore. Pl help soon.

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Do you think Alan Greenspan and Bush both stink sky high?

admin — Tue, 03 May 2011 04:05:54 +0000

American economy has been fueled by consumption. Everybody thought their house was going to appreciate forever. They keep taking the $$$ out of their home equity and banks are more than happy to lend 100% on any loan. The president spends our money like American consumers. Over a trillion dollars for what??? I don’t feel any safer.Alan Greenspan, in fear of recession citing Japan., kept the interest rate so low that every Tom, Dick, and Harry with social can get an easy loan. The difference between japan and the U.S is that Japan produces more than it consumes. Japan had trade surplus, we have trade deficit. Japanese yen is actually appreciating while our dollar is depreciating. Japan is a country of savers, the U.S is a country of spenders.

What’s going to bail us out after Bush? I hate this sh!t.
On top of that most of the stuff we consume comes from overseas.

O.k, I admit I didn’t go to ivy league school but they did. They should know better.

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Do i need to have 20 % down when i refinance from FHA to Conforming and does the down amt from FHA counts?

admin — Wed, 20 Apr 2011 22:55:41 +0000

Hello everyone. I am purchasing a house but the loan I could get was FHA because i did not have 20 % down and not enough credit for conforming loan. I could put 15 % down on the house but my question is whether i should do that or go with the minimum of 3 % because with FHA loan you pay premium mortgage insurance 1.5 % upfront and .5 higher interest rate. Lets say if i build a better credit in 6 months to qualify for a conforming rate and refinance the house from FHA to conforming do i need to have 20 % down for conforming loan or should i put the money to FHA loan and that 15 % is counted as home equity. All I need is 5 % after that right or do i need to have 20 % in cash?
I asked this question once but mostly i got people trying to get me to contact them for loans. I dont need that. Only respond if you know the answer.
Nop I cant get a conforming right now. I could come upwith the 20 % but not enought credit. Please answer about the amount i should put on FHA loan. Would the 15 % count when i refinance to confroming to make 20 % or do i need to hold the money so i can have them for the conforming loan in about 6 months when i build up my credit.
I have no choice FHA is what i am getting right now. Please focus on the question I need to know about the % amount whether it is better for me to put down 15 % on the fha or should i put down 3 % and save the money for the conforming when i refinance. I would put 15 % if the money counts toward the refinance to conforming in the future to make 20 %. total after adding 5 %.

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My banks keep messing up my loans/terms, any advice?

admin — Sat, 26 Mar 2011 01:15:11 +0000

I had a few loans out through my significant other, one small one that i used for a car about ,000, one larger one for about ,500, and then we had some combined stuff to do around the house, etc, so that was a home equity for about ,000…all in all those were gotten about a year or two fairly closely together though, and they all started out as lines of credit, fixed interest rates.

We both kept making payments on time, and were on great terms, then this whole credit crisis hit…our credit cards, some of them, the limits got slashed, one or two just closed…..then two of these lines of credit became variable rates…and then if that wasn’t enough, they reduced the terms from lets say 6 and 8 years down to 5, just like that…

and just today I found out that they’re freezing them, the two of them, and they’re no longer lines of credit just simply loans..which totally eradicates drawing more on it lets say at a later date.

So now I especially am very angry, because I feel like we’re being messed around by these banks just because they "can," even though we have good if not great credit, make our payments on time, and that’s actually not THAT bad of outstanding debt being that it’s not all under one person’s name.

it’s just ridiculous though. We’ve been paying them down, and we still have alot of other credit available that we NEVER use, and income is good..everything is good.

So now I’m depressed, becuase in the last year, with all this slashing, it put a serious dent into being able to withdraw espeially for necessary things like health bills.

So as of right now I want to know what the best option would be?

Should I just let things go how they are, or should I try a different bank and then just consolidate a few into one bigger loan, or try to get a line of credit and just transfer over and pay off the, forgive my language, cr@ppy loan deals we now have?

Another concern is, with this outstanding debt, which isn’t astronomical but it’s still quite a bit…

will they be less likely to approve, especially if it’s secured? Does going in person help any..rather than just over the phone and internet, and perhaps putting up a collateral or securing it with something might help?

The thing is, I used personal lines of credit to have as a safety net, just in case emergencies come up, I mess up and over spend,, or whatever financial crisis may arise especially in THIS economy, and it’s something that you pay down but can also reach in if you need it.

IT’s great for rescues, but now banks are seriously cutting that down, and well….not much is available.

So I’m very upset over it. I mean I can understand the economy being bad but…these banks aren’t even giving out notices ahead of time to WARN us about changes@!

They NEVER notified us about this recent change where they’re just becoming loans and not lines of credit which we got APPROVED of.

no letter in the mail, just happened.

This is all by the way, BANK OF AMERICA!

the other one is with capital one, and they’re fine thus far.

is bank of america just a bad place to do business with?

They even treat their LOYAL customers like dirt and we’ve been banking with them for a long time now!

Very depressing I’ll say.

What are our options? I don’t want to go into some debt consolidation thing either because I can totally pay off the bills from the loans etc, tey’re not that much considering they’re spread out for many years, and they serve a great purpose to withdraw money from if they’re lines of credit.
also, once the banks do this, are these permanent changes or can they be subject to change? Bank of America’s reasoning was : well we just don’t DO lines of credit anymore.

Fine, but why should we then bank with them?

It’s our money too we’re paying back, so why pay under one bank’s conditions & terms you don’t agree with.

If another bank is more negotiable and nice to their customers & offers better rates/plans…..then…why stick with bank of america?

They seem very blase about actually working with you. IT’s more like…this is what we offer, this is not, take it or leave it GOODBYE, no care about good customer service or a good payment history NOTHING.

I feel like a number and they treat you almost condescendingly.

Well why do banks offer these services…if they later complain that people shouldn’t be USING THEM? It’s a catch 22, if no one used them…their businesses wouldn’t be as successful.

Banks, what’s the deal!?

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How to get a Home Equity loan with a house in a trust?

admin — Thu, 03 Mar 2011 00:15:23 +0000

My mother and father have both passed away and left my 3 other siblings (including myself) the house. The house is in a trust that has all our names on it. My husband and I live in the house and have the past 4 years and would like to do some home renovations. However, we have been told that we can not take a home equity load because the house is in a trust. Any suggestions? The house is paid off.

Thanks!

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Where can I get a home equity loan given I don't have a job right now?

admin — Thu, 24 Feb 2011 02:53:57 +0000

I thought I could extend my "vacation" by using maybe ,000 of my 0,000 home equity to pay my bills for a couple more months. Everyone I have contacted says you must have income to get a loan. Oops! Any ideas? I will get a job, but need a month or two worth of cash.