What is a Home Equity Loan?
Have you considered tapping into your home equity to send a child off to college, or remodel your home? A home equity loan is a fixed or adjustable rate loan that uses your home equity as collateral. You borrow a certain amount to be repaid monthly during a set period of time, similar to first mortgage agreement. The terms "home equity loan" and "second mortgage" are often used interchangeably.
Getting the Loan
Getting your first mortgage loan is a process similar to that of a home equity loan. Your closing costs (usually 2-3 percent of the loan amount) are typically lower and, even though your interest rate is bigger on a home equity loan, the interest paid can be tax deductible.
You will have to provide proof of your salary and have a reasonable credit score to qualify for a second mortgage. A home appraisal is necessary to calculate the property's market value. To explore your home equity choices, call us at 310-379-5997.
Have questions about your home equity? Call us at 310-379-5997. Real Property Finance answers questions about home equity every day.