Equity FAQ
What is the difference between an Equity Line of Credit and another type of second mortgage?
An Equity Line of Credit is money in a loan account that can be used as you need it. You can use any portion of it at any time and pay it back at any time. The interest rate is usually variable and is tied to the prime rate. Another type of second mortgage is the Home Equity Loan which is a closed end loan product. You borrow a lump sum and pay it back over a period of years with interest. The interest rate for this product is fixed.
Will a second mortgage allow me to borrow funds against my existing property?
ditech offers several solutions to borrow funds against your existing property value.
- Home Equity Line of Credit
If you want a reserve of funds you can draw on in the future, choose our Home Equity Line of Credit. You'll have the credit you need when the need arises - and you make no monthly payments until you draw on it. Be ready for expenses like medical bills, emergency home repairs, tuition, and more.
- Home Equity Loan
If you want to borrow up to 100% of your home's value at a fixed rate of interest, choose our Home Equity Loan. Use those funds for a purchase opportunity, home maintenance, debt consolidation, or major expenses.
To learn more about these and other products, call us any time at 1-800-DITECH-3.
How do I know how much equity I have in my property?
Equity is the value of a homeowner's interest in real estate. Equity is computed by subtracting the total of the unpaid mortgage balance and any outstanding liens against the property from the property's fair market value. A homeowner's equity increases as he or she pays off his or her mortgage or as the property appreciates in value. When a mortgage and all other debts against the property are paid in full, the homeowner has 100% equity in his or her property.
How can I draw credit when I need it?
If you want a reserve of funds you can draw on in the future, choose our Home Equity Line of Credit. You'll have the credit you need when the need arises - and you make no monthly payments until you draw on it. Be ready for future expenses like medical bills, emergency home repairs, tuition, and more.