Mortgage Debt Financing - One Way to Fund Your Home Based Business

What is mortgage debt financing?

Quite simply, it’s using the equity you have built up in your home ownership.

You leverage your equity, through a line of credit or a second mortgage so you have the necessary funds to work with.

If you’re over leveraged, this option may not be right for you, however, if you have quite a bit of equity built up, this approach can be very attractive.

One rule of thumb to determine whether or not this is a good option for you is if your current equity is substantially over 20% of the value of your home. If it's less than 20%, you should consider other financing options Mortgage rates are relatively low right now. There are some good mortgage lenders available online, and you can even apply online, saving you time and hassles.

We recommend you take the following steps when considering mortgage debt financing:

1. Obtain rate quotes from several lenders online.
2. Ask for the lowest rates for the week.
3. Once you decide on the lender, lock in the rate to avoid increased while your loan is being processed. This may require paying a small fee, but you can usually get this refunded when your loan is funded.
4. Protect yourself from mortgage rate increases while residential or business mortgage loans are being processed. Once you agree on a residential or business mortgage rate, you may want to obtain a lock-in. There may be a small fee, but it can most likely be refunded at closing.