What is a Home Equity Loan?
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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 or adjustable rate loan that uses your home equity as collateral. You'll repay this loan over an agreed time period by making monthly payments, like with your first mortgage loan. A home equity loan is sometimes also called a second mortgage.
Getting the Loan
The steps toward a home equity loan are similar to getting your existing mortgage loan. You will be pleased to know that the closing costs are smaller with a home equity loan, and even though there is a higher interest rate than a first mortgage, the interest may be deducted on your taxes.
In order to qualify for a second mortgage, you must have a positive credit score and you must be able to document your income. To assess your home's current value, your lending institution will ask for an appraisal of your home. To discuss your home equity/second mortgage options, contact us at 760-752-4480.
Have questions about your home equity? Call us at 760-752-4480. VanDyk Mortgage answers questions about home equity every day.