A home equity loan is a type of loan where the homeowner taps into the equity they have built up in their home. These home equity loans are often used to help finance major projects around the house, pay for unexpected medical bills or a child's college education.
Home equity loans are most often a second lien but can at time take the form of a 1st lien if the home currently has no outstanding mortgage. In the instances where a first mortgage is present the home equity loan take the form of a second mortgage. When looking for a second mortgage you can expect the banks to require at least a good credit score so make sure you are in the best financial position possible in order to get the best terms available on a home equity loan.
Home equity lines of credit are another financing option when looking to access the equity in your home. A home equity line of credit or HELOC however is much different than a home equity loan. A home equity line of credit is a revolving line of credit that carries an adjustable interest rates whereas the home equity loan is a lump sum payout that often comes with a fixed interest rate.
If you are interested in learning more about all your home equity loan and line of credit options speak with a qualified lender today.
