|
FAQ Topics
|
Frequently Asked Questions | Home Equity
Why should I consider taking out a Home Equity Loan?
It's a way to use the equity in your home to make improvements ... and make your home more livable
for you. Interest paid on home equity loans is often tax deductible, too. Check with your tax advisor.
How does it work?
Usually, you take out a Home Equity Loan for an existing or current need — such as renovating
your home, replacing a roof or constructing an addition. The interest rate and payments are fixed,
so you know just how much to budget for repayment, and the term can be as long as 20 years.
Can I use the loan for anything else?
Sure. People often use a home equity loan to pay for things such as tuition; or to consolidate high-interest debt and lower monthly payments. Used correctly,
a home equity loan can be an excellent financial tool. Talk to us about it.
Is the rate variable or fixed?
Is the interest tax deductible?
It is in many cases. Please check with your tax advisor.
What is the difference between a home equity line of credit and a home equity (Second Mortgage) Loan?
A home equity line of credit is a flexible account that allows for repeated borrowing without having to re-apply each time. A more traditional second mortgage loan provides you with a fixed amount of money repayable over a fixed period. Usually the payment schedule calls for equal payments that will pay off the entire loan within that time. You might consider a traditional second mortgage loan instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home.
In most cases, a recurring need for funds suggests the need for a home equity line of credit. A good example of this are tuition payments.
|
|