With the 125% loan, the home owner is able to borrow more than the actual value of the home. The actual amount available to be borrowed in a 125% loan is dependent upon the real estate value of the home and the amount already owed on the home through a mortgage or other loan program. The 125% loan is often used to access cash for large purchases. The 125% loan may also be used to make home improvements and increase the real estate value of the home. Because the 125% is a partially unsecured loan it may have higher rates than other home mortgage loans.

The 125% loan translated into dollars

The 125% loan uses a calculation of home value percentage to determine the amount available for the loan. The125% loan means that you are able to access more than the total amount of the home