What is a Home Equity Loan?
Do you need to tap into your home's equity to pay for a home remodeling project or to pay off a credit card? A home equity loan is a fixed-rate or adjustable-rate loan that uses your home equity as collateral. As with your first mortgage, you borrow a specific sum of money to be paid back monthly over a period of time. You can use the terms "home equity loan" and "second mortgage" interchangeably.
Getting the Loan
The steps toward a home equity loan are similar to getting your current mortgage loan. You will be happy to learn that the closing costs are lower with a home equity loan, and even though there is a higher interest rate than a traditional mortgage loan, the interest can be deducted on your taxes.
To qualify for a second mortgage, your credit has to be in good standing and you should be able to provide documentation of your salary. To figure out your home's market value, your lender will require an appraisal of your home. To check on your home equity/second mortgage loan options, call us at 214-663-5355.
Have questions about your home equity? Call us at 214-663-5355. Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 answers questions about home equity every day.