Home Equity Lending Options in Orange County

By Allison E. Beatty
Local Lender Columnist
Nov 13, 2006
Planning to remodel your kitchen? Need to replace your roof, or buy a new car? There are many ways to tap into your Orange County home equity, accessing funds for major expenses or everyday bills.

The two popular ways to access your home equity is through a loan or line of credit. Both are essentially second mortgages on your home. These mortgages are ideal for Orange County residents looking to tap into the market appreciation that has blessed the region.

Home Equity Loan or Line of Credit

Before deciding which home equity program is best for you, consider how these mortgages are structured. A home equity loan is for a specific dollar amount and loan term, offering a fixed interest rate. Home equity loans are best if you:

• Need a specific amount of money.
• Want the stability of a set interest rate and payment plan.
• Don't foresee the need to access more money in the near term.

Do You Need Mortgage Flexibility?

A home equity line of credit offers the flexibility of accessing cash when you need it, up to the account limit. These mortgages typically carry a variable interest rate. When you finish remodeling your Orange County kitchen, you can take out extra funds to fix the bathroom. You only pay interest on the outstanding amount on the credit line.

How Much Home Equity Can You Tap?

Many mortgage lenders allow you to access 80 to 90 percent of your accrued equity; the loan amount is determined following a home appraisal. As you talk with mortgage lenders, consider:

• Whether a variable or fixed interest rate meets your needs.
• The fees associated with each mortgage program. Among the common fees are:
  • Property appraisal fees
  • Title insurance fees
  • Loan origination costs
  • County filing fees
• Quick approvals and "no documentation" loans that minimize paperwork.
• The tax benefits - the interest on the loans may be tax deductible.

About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing columns for 15 years.