Home Equity Loans

A home equity loan uses your existing home as collateral. Your home equity is the difference between the value of your home and the amount you owe on your mortgage. A home equity loan is also known as second mortgage. A home equity loan allows you to borrow money against your home by using the available equity as collateral for the loan.

There are two basic types of home equity loans:

  • The Standard Home equity loan: This loan is just like any traditional loan where you borrow a certain amount at a fixed rate of interest and pay back the amount in a fixed period.
  • Home Equity line of Credit: It works like any other line of credit. You are granted a certain amount that you can borrow, and you draw money from the account as per your requirements. You pay interest only on the amount actually borrowed and the rate of interest varies over the term of the loan. While most home equity lines of credit have a variable interest rate, a fixed interest rate can sometimes be considered. The money in a home equity line of credit can be accessed using specially issued checks or credit cards. This can be very helpful when paying for college or doing home improvements because it you get immediate pre-approved access to additional cash, but you only pay interest on the amount you've drawn from the line of credit.

Connect with our Specialists to help you decide, which type of home equity loan is best for you.

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