What is a Home Equity Loan?

Have you considered tapping into your home equity to send a child off to college, or remodel your home? A home equity loan is a fixed-rate or adjustable-rate loan that is secured by the equity in your home. Similar to your first mortgage, you'll borrow a specific amount to be paid back monthly over a period of time. The terms "home equity loan" and "second mortgage" can be used interchangeably.

Getting Your Home Equity Loan

The steps toward a home equity loan are similar to getting your existing mortgage. Your closing costs (usually 2-3 percent of the loan amount) are generally smaller and, even though the interest rate is larger on a home equity loan, the interest paid will be tax deductible.

In order to qualify for a second mortgage, your credit must be in good standing and you need to be able to provide documentation of your income. A home appraisal is required to calculate the home's current market value. To talk about your home equity choices, contact us at (305) 891-6500.