Home Equity Loans

  What is a Home Equity Loan ?

A home equity loan allows you to borrow money using your home's equity as collateral. Equity is the difference between how much you owe on your mortgage and how much your home is worth. A home equity loan is like a second mortgage allowing you to turn your equity into cash which you can use for home improvements, college education or other expenses.

  What's the difference between Home Equity Loans and Home Equity Lines of Credit ?

Home Equity Loans are provided as a lump sum and are paid off in monthly installments over a set period of time.

Home Equity Lines of Credit, or HELOC's as they are known, work like a credit card and have revolving balances. Both types of home equity have relatively low interest rates and the interest payments are tax deductible.

How it works. Let’s imagine that your home mortgage is for $350,000, but after years of paying on that note, you only  owe the mortgage company $100,000. then you would have $250,000 of equity in your home. A home equity loan is a specific type of loan that will allow you to borrow against that equity.

A great reason for taking out a home equity loan is to make improvements on your home. Have you been thinking about adding a swimming pool to your yard? A new addition? A home equity loan is a great way to finance those types of projects.