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There are many types of home loans available today. Whether you’re buying a home or looking for a better home loan program to get cash fast, consolidate debt or save money, there are options available.

First Mortgage
When buying a home, borrowing money from a lender to purchase it is usually a part of the process. The first position home loan taken out on a property is called the first mortgage. When you take out a home loan or first mortgage on a property, you agree to pay the lender back over a certain period of time and pay interest charges.

There are usually other fees included as part of buying a home, called closing costs. Closing costs vary, but usually include:

• Loan application fees and credit report fees
• Title search and insurance fees
• Lender’s attorney fees
• Property appraisal
• Inspections
• Survey
• Recording fees
• Transfer taxes
• Buyer’s attorney
• Documentary stamps on new note
• Points and origination fees
• Condominium application fee
• Escrow account balances/prepaids

You are notified of these costs upfront in what’s called a Good Faith Estimate — a written estimate of closing costs which a lender must provide you within three days of submitting an application. Closing costs may also be rolled into the total loan mount, so you have little to no out-ofpocket costs.

Home Equity and Second Mortgage
The 2nd Mortgage, also referred to as a home equity loan, is usually a second loan taken out on a property. This loan option allows homeowners to use the available equity in their home — the difference between the current market value of the home and the amount still owed on it— as collateral to guarantee the loan will be repaid.

A second mortgage can be ideal for borrowers who need a set amount of cash to consolidate debt and other high interest debt. A second mortgage or equity home loan is also commonly used for:

• Home improvement or repairs
• Buying a new or used vehicle
• School tuition and college costs
• Medical bills
• Weddings
• Vacations
• Start a business
• Other large purchases as investments,such as a boat, RV or even land

Home equity seconds can also offer financial and other benefits including:

• Lower interest rates than other forms of borrowing, such as credit cards, personal loans or auto loans
• Flexible, easy ways to access the cash when you need it
• Usually little paperwork needed
• Interest payments are tax deductible in most cases

Refinancing
This is when a mortgage is “rewritten” on a property with terms that are generally more favorable to you, the borrower — usually a lower interest rate and lower monthly payments. This new mortgage pays off your existing mortgage and becomes the current mortgage on the property. Many homeowners refinance to get cash to consolidate debt into a low-interest, cash-out refinance home loan and eliminate high-interest debt and other loan payments.

With a cash out refinance loan you refinance your mortgage for more than you currently owe (up to the available equity you have in your home), and get cash back for the difference. You can then use that cash to pay off your other debt or for anything else you need —home improvements, a new vehicle or medical or education expenses. Other considerations before you refinance your existing home loan include:

• Closing costs can usually be rolled into your new mortgage balance, so usually there’s little or no cash needed to refinance
• You could get a lower interest rate than on your original loan if your finances have improved or interest rates have gone down
• Interest payments, as with all home loans, are tax deductible in most cases