What Is a Home Equity Loan?

If you’re in need of some extra cash a home equity loan may be your best option. Unlike other types of loans, a home equity loan allows you to use built up equity in your home as collateral. And because the loan is secured by your home, you can expect a much lower interest rate. And unlike credit cards, the interest you pay may be tax deductible.

A home equity loan is basically a second mortgage that lets you use your home equity for cash. Equity loans allow you to purchase things like: home repairs, debt consolidation, medical bills, or even college tuition.

Home Equity Loan or Home Equity Line of Credit

While a home equity loan is usually for one lump sum. An equity line of credit (or HELOC) is setup something like a credit card. With an HELOC you’ll be able to withdraw funds from your account, repay, then do it all over again.

Terms of Home Equity Loans

Most home equity loans are setup on a shorter term than your original 30-year mortgage. An equity loan term can range from 5 years to 15 years. In most cases, you will need to talk with an equity loan advisor to find out what terms are available to you based on your specific situation.

How Much Equity Is In Your Home?

Equity is the difference between how much you owe, and how much your home is worth. So if you purchased a home for $100,000.00 and put $20,000.00 down, you have $20,000.00 in equity.

Get More Information About Home Equity Loans

If you would like to get more information about a home equity loan, just fill out our easy 1-minute form. Our home equity lenders will answer all your questions, and recommend a home equity loan program that fits your specific needs.