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 your home equity is called a "home equity loan." Similar to your first mortgage, you can borrow a certain sum of money to be paid back monthly over a certain period of time. A home equity loan also can be called a second mortgage.
Getting the Loan
Getting your first mortgage is a similar process to that of a home equity loan. Your closing costs (often 2-3 percent of the loan amount) are usually smaller and, although the rate of interest is larger on a home equity loan, the interest paid can be tax deductible.
To qualify for a second mortgage, you will need a reasonable credit score and you need to be able to document your salary. A home appraisal is necessary to assess the home's current market value. To discuss your home equity/second mortgage loan options, call us at (909) 467-1090.