What is a Home Equity Loan?

Perhaps you are considering tapping into your home equity to renovate your kitchen, or take care of the balance on a credit card. A fixed- or adjustable-rate loan that is secured by the home equity you have built up is called a "home equity loan." You borrow a lump sum to be paid back in monthly payments during a set period of time, much like your original mortgage. The terms "home equity loan" and "second mortgage" are often used interchangeably.

Getting the Loan

You will be accustomed to the process as it's much like getting your first mortgage. You will be pleased to learn that the closing costs are smaller with a home equity loan, and although there is a higher interest rate than a first mortgage, the interest can be deducted on your taxes.

If you'd like to qualify for a second mortgage, you will need a reasonable credit score and you need to be able to provide documentation of your income. To assess your home's current value, your lending institution will require an appraisal of your home. To discuss your home equity choices, contact us at (281) 778-0805.

Have questions about your home equity? Call us at (281) 778-0805. It's our job to answer home equity loan questions, so we're happy to help!

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