How to Manage Joint Equity Loans
When a person decides to seek equity loans and there are more than one applicant, the banks will
base income differently when considering the loan. In most instances, the applicants can request an
equity loan three times the amount of the first income and half the amount of the second income,
and/or two-and-a-half times of the incomes combined.
One advantage of the joint equity loans is
that the higher deposit put down toward the payoff of the loan, the less you will pay in APR. Most
lenders request a depositing amount of 3 - 10% of the asking price of the property you want to buy.
However, this depends on the area and lender and what they lenders offer.
Joint equity income loans offer advantages; however, there are also disadvantages that could put the
joint borrowers and the lender at great risks. It is important to learn the laws on joint equity loans,
since if one or the other decides they want out of the deal, then the lender will have a tough time
extracting the mortgage payment.
And the borrowers will have a hard time deciding who owns the
house and who has the right to sell it.
Can one of you rent the house for extra income if you should decide to move into another home?
Joint equity loans are frightening, since if one of the parties paying on the home becomes angry, this
person may attempt to kick you out of your own home.
It is important that you know that the law
states that neither of the joint owners (one or the other) has to leave his/her home, unless the court’s
injunction requires that the party leave the property.
Therefore, joint equity loans can often be risky;
so if you intend to take out joint equity loans, make sure you know the laws, and know where both
you and the joint applicant stands.