Question:

Can I get a 125% LTV home equity loan?

Answer:

The question is should you get a 125% LTV home equity loan? Not really. With a no equity loan, you are taking a higher rate, and basically expose yourself to higher risk of default.

The 125% home equity loan is not always recommended. Why?

A 125% CLTV home equity loan program might be a great resource for immediate cash if you have an emergency, or a stable business development or investment plan. However, if you need to sell the property, or move you may not be able to sell the property for as much as you need to satisfy your debt.

Also, at the moment lenders are not willing to make no equity home loans. Those who are offering them are charging higher rates to compensate the risk. That is, you will be making larger monthly payments, compared to lower LTV loans.

A 100% LTV home equity loan might work better for you than 125% CLTV 2nd mortgage/HEL/HELOC. However, if you really need one, shop for a good one and follow a stable loan repayment plan to avoid distress.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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