What is a home equity loan?
A Home Equity Loan allows homeowners to borrow against the equity in their property. Equity is the value of a homeowner’s interest in real estate. Homeowners often apply for this type of loan to make home improvements or to pay college tuition or pay off debt. Home Equity Loans (also known as second mortgages) typically have a fixed-rate, but PFFCU does have a 20-Year Adjustable-Rate Home Equity Loan.
A Home Equity Loan allows homeowners to borrow against the equity in their property. Equity is the value of a homeowner’s interest in real estate. Homeowners often apply for this type of loan to make home improvements or to pay college tuition or pay off debt. Home Equity Loans (also known as second mortgages) typically have a fixed-rate. If you have equity in your property, the lower rate of an equity loan may be preferable to an unsecured personal loan.
The dollar difference between the market value of your home and your current mortgage balance determines your home’s equity. In other words, if you sold your home this would be the cash that would be available after the sale. A home equity loan allows you to access this cash without selling your home by using your home as collateral. As you pay down your mortgage, and/or your home’s value increases, your available equity increases accordingly.
A home equity loan is a form of credit for which your home is pledged as collateral. Generally, home equity loans offer a fixed interest rate and a fixed monthly payment. A standard home equity loan (also called a second mortgage) is paid off over an extended period of time. You can estimate your home equityEquity. The difference between the value of a property and any outstanding mortgage balance(s) or liens against it. Also referred to as owner’s interest. by adding the balance of all the debts secured by your home, then subtracting the total from your home’s value.
