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. In a home equity loan, your fixed or adjustable rate loan is secured by your home equity. As with your first mortgage, you'll borrow a certain sum of money to be repaid monthly over a period of time. A home equity loan also can be called a second mortgage.

Getting the Loan

Getting your first mortgage is a process similar to that of a home equity loan. Your closing costs (often two to three percent of the loan amount) are usually lower and, although your interest rate is higher on a home equity loan, the interest is tax deductible.

If you would like to qualify for a second mortgage, your credit has to be in good standing and you need to be able to verify your salary. A home appraisal will be necessary to calculate the home's current market value. To talk about your home equity choices, contact us at 5129169955.

Have questions about your home equity? Call us at 5129169955. Counselors Mortgage answers questions about home equity every day.