What is a Home Equity Loan?

Perhaps you are considering tapping into your home equity to renovate your kitchen, or take care of the balance on a credit card. In a home equity loan, a fixed or adjustable rate loan is secured by the equity in your home. You will repay this loan over an agreed time period by making monthly payments, just like your first mortgage. You can use the phrases "home equity loan" and "second mortgage" to mean the same thing.

Home Equity Loan Specifics

Getting your first mortgage is a process similar to that of a home equity loan. Your closing costs (usually 2-3 percent of the loan amount) are typically smaller and, although the rate of interest is higher on a home equity loan, the interest paid can be tax deductible.

If you'd like to qualify for a second mortgage, your credit needs to be in good standing and you need to be able to verify your income. To figure out your home's current value, your lending institution will require a home appraisal. To explore your home equity loan choices, contact us at 2146635355.

Have questions about your home equity? Call us at 2146635355. Debbie Oliver NMLS License #248252, America's First Choice Mortgage, NMLS License #279234 answers questions about home equity every day.