on a home equity line of credit does the orginal mortage company gets paid off or does that payment stay.?

Question

Do you have that payment plus the home equity line payment as well.

Answer 1

that really depends... normally you wouldn't pay off your mortgage balance because the rates on the home equity lines are about 1-3 percent higher than your mortgage (depending on your credit).

when someone takes out a 2nd mortgage (aka: home equity line or home equity loan)... they do have an ADDITIONAL payment which is separate from the mortgage. make sure you only borrow what you can afford... and make sure you know your terms on the home equity line/loan. it might be fixed interest payments for 3 years and then it changes to amortized payments afterwards. be careful and make sure you know what you're signing before you take out a 2nd.

(:

Answer 2

Let me first explain what equity line of credit really is.

You buy a house and you make regular payments. So over time, you own more and more portion of the house. Also, the value of your house may increase. When THAT happens, you will be holding (in your hand) more valualbe house than what your debt says. Simply, you own portion of your house and bank owns other portion.

The portion you own is called the equity.

Since you have a valuable "stuff", equity, in your hand, bank is willing to loan you money for an exchange in having your equity as a gurantee. Be careful with this. When you don't pay your equity loan, the bank can and will take your house to satisfy your debt! You should use your equity loan carefully because of this very reason.

Anyway, what will happen is, your house payment will stay the same. On top of it, when you take out the equity loan, you have THAT payment, too.

When you SELL your house, your equity loan has to be paid in full. It usually comes out from the proceed from the sale of the house.

Once again, be careful with the equity loans. Most other loans can't touch your house even if you default. Banks can when you sign up for the equity loan.

Answer 3

The original mortgage loan will remain the same. A home equity line of credit is created separately. Yes, you would have two payments to make. The equity loan, does not change the original in anyway or rewrite it. It is a fairly easy way to get a loan and lower rates, because of the mortgage history. The equity loan, can be a lien...so treat it very carefully.

Answer 4

Ordinarily home equity line of credit applies to older citizens who have paid off their original mortgage and are reborrowing money based on their ownership in the property.If part of the original mortgage is still owed, the borrower is obligated to pay down both mortgage and equity loan, Thorough investigation of equity line of credit is mandatory and reading and understanding the fine print is a prudent move.