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Today's Topic: "125% Home Equity Loan"
A 125% home equity loan is when you borrow the amount of your equity in addition to 25% more.
1. You must have good credit.
The 25% of the loan is unsecured, so you must have good credit to qualify.
2. You are not allowed to sell your home.
That is until after you pay off your original mortgage and the equity loan.
3. This type of loan carries a higher interest rate.
The 25% extra in the loan as not being secured. It is therefore a higher risk to the lender, so the interest rates will be higher.
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