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." You borrow a certain amount to be repaid with monthly payments over a set period of time, like you first mortgage. A home equity loan also can be referred to as a second mortgage.
The steps toward a home equity loan are similar to getting your current mortgage loan. The closing costs (often 2-3& of the loan amount) are typically smaller and, although your rate of interest is larger on a home equity loan, the interest will be tax deductible.
You'll have to provide salary documentation and have a positive credit score to qualify for a second mortgage. To assess your home's market value, your lending institution will require an appraisal of your home. To discuss your home equity/second mortgage choices, call us at 205-941-1484.
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