Home Equity Loans: Your Questions Answered
What is a Home Equity Loan?
A home equity loan allows you to borrow money using the equity in your home as collateral. The amount is determined by your home’s value, assessed by a licensed appraiser, minus your current mortgage balance. These loans are commonly used for major expenses like home repairs, medical bills, or college tuition.
What Types of Home Equity Loans Are Available?
- Fixed Home Equity Loan (Closed-End): A set amount borrowed upfront, with fixed monthly payments over a specific term.
- Home Equity Line of Credit (HELOC, Open-End): A flexible line of credit that allows you to borrow as needed, with interest-only payment options.
Which Loan Type is Right for Me?
- Fixed Home Equity Loan: Ideal for known expenses or when you want predictable payments and a set payoff timeline.
- HELOC: Perfect for ongoing or uncertain expenses, offering flexibility and access to funds over time.
What Do I Need to Qualify?
- Credit Score: Minimum of 600.
- Loan-to-Value Ratio: Typically up to 80%.
- Income Verification: Proof of income and ability to repay the loan.
Things to Consider
- Your home serves as collateral, so failure to repay may result in foreclosure.
- Loans generally have repayment terms of 5 to 15 years.
- If you sell your home, the loan balance must be repaid before the lien is released.
Ready to Learn More?
Speak with one of our specialists to explore your options and find the right Home Equity Loan for your needs!