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One good loan to look into when buying a house is called a home equity loan. These loans are nice because it lets you borrow money against the house you are trying to buy. This loan is used to buy homes in need of minor home repairs so usually, you can get the loan on a fixer upper for a really good deal and then turn around and get money to fix it up so you can get more equity into your house right away. All of this has to be done when the original loan is signed and if you do decide to borrow against the house right away, it will deplete the overall value of the house for now. Once the loan is paid off, the value of the house will go back up so you will not have to worry about that.

With the home equity loans it also allows you to refinance your existing loan to see if you can get a better interest rate, and most often you can get a better rate saving you some money per month and less time overall to pay it off. You can also deduct this type of loan on your personal taxes if you live in the US. Two types of second mortgages exist on the second mortgage, a market-open loan and a closed end loan. A market-open loan is basically is the same as the first mortgage, same criteria and everything. The other type, closed end mortgage loan, you can get a large lump sum of money when you sign the papers at closing time. If you decide to go with the closed end loan, you can no longer borrow money against the house until you pay it off in full.

If you are going to refinance you house be careful a d decide what second mortgage you want. If you know one will work best for you then take that option because you dont want to cause more problems later down the road for you and your family.