125 percent loan
The old adage which says that anything too good to be
true usually is, may or may not be true, depending on how
you work certain offers and product incentives to your advantage.
For example, the second mortgage often delivers benefits
that are overwhelmingly favorable without any hidden setbacks:
• Save money now to maintain financial control
• End Debt - Today
• Reduce monthly payments
The above promotions and instantaneous money fixes are
considered part of the 125 percent loan or second mortgage.
The loan product is name a second mortgage because it allows
the homeowner or borrower to take out a second mortgage
of up to 125 percent of the value of the existing residential
property. American consumers, racked up in debt, are attracted
or inspired by the loan because they see it as a way out
of their monetary woos.
The central feature of the 125 percent loan include: an
interest rate lower than what the average consumer pays
in credit cards. Because so many credit cards carry interest
rates of 15 percent or more, the loan can positively sidestep
the homeowner to go in a new direction.
Moreover, since the second mortgage comes with a lower
monthly payment, the American consumer is attracted to the
possibility of amortizing their debt over a 15-to 30- year
period rather than paying for it all within the next few
years. Another enticing feature of the 125 percent loan
is, that in comparison with a credit card, the principal
payments of the 125 percent loan reduce overall monthly
fees by a third or more by transferring or consolidating
the debts into a second mortgage.
The 125 percent loan has another sparkling feature that
borrowers often find irresistible. For the home loan consumer
considering this type of financing, the best advantage is
that a portion of the entire interest expense may be deducted
from federal income taxes.
Now while the above features may represent an exceptional
way to eradicate one debt load or schedule of monthly bill
payments, a borrower should consider their future financial
plans and living arrangements.
For example, a homeowner who is overwhelmed by debt and,
though they plan to move or sell in the near future, the
property value of their home has sizably appreciated, the
125 percent loan is an ideal solution. But for the person
neck deep in debt and, while their home has not dramatically
increased in value nor do they have an interest in relocation,
a little more time should be put into considering all available
financial options, as well as, the possibility of a employing
a debt consolidation program.