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 secured by the home equity you have built up is called a "home equity loan." You borrow a certain amount of money to be paid back monthly over a set time frame, like you first mortgage agreement. The terms "home equity loan" and "second mortgage" are often used interchangeably.
The steps toward a home equity loan are similar to getting your first mortgage. The closing costs (usually 2-3& of the loan amount) are typically lower and, even though your rate of interest is more on a home equity loan, the interest paid will be tax deductible.
You'll have to document your income and have good credit to qualify for a second mortgage. To figure out your home's current value, your lending institution will require an appraisal of your home. To discuss your home equity loan options, call us at 205-941-1484.
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