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 your home equity is called a "home equity loan." As with your first mortgage, you can borrow a specific sum of money to be repaid monthly over a period of time. The terms "home equity loan" and "second mortgage" can be used interchangeably.
Getting your current mortgage loan is a similar routine to that of a home equity loan. Your closing costs (usually two to three percent of the loan amount) are usually smaller and, even though your rate of interest is bigger on a home equity loan, the interest can be tax deductible.
You will have to document your income and have a positive credit score to qualify for a home equity loan. To assess your home's market value, your lending institution will ask for an appraisal of your home. To check on your home equity loan options, call us at 205-941-1484.
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