Have you considered tapping into your home equity to send a child off to college, or remodel your home? A fixed- or adjustable-rate loan that is secured by the home equity you have built up is called a "home equity loan." You'll repay this loan over an agreed time period by making payments monthly, just like with your first mortgage loan. The terms "home equity loan" and "second mortgage" are often used interchangeably.
You'll be comfortable with the process as it's much like getting your first mortgage. You will be pleased to learn the closing costs are smaller with this loan, and although there is a higher interest rate than a first mortgage, the interest may be deducted on your taxes.
You will have to provide proof of your income and have good credit to qualify for a second mortgage. To assess your home's current value, your lending institution will ask for a home appraisal. To explore your home equity/second mortgage loan choices, call us at 205-941-1484.
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