A home equity loan is also known as a second mortgage. Essentially, with a home equity loan, you borrow money against the value of your home (in this way, you use your home as collateral for the loan). The value of your home will impact the amount of money you may qualify for in a home equity loan. It also depends on how much you still owe on your current mortgage. You can’t over owe on your home the sum of the current mortgage, and the home equity loan cannot exceed the value of your home. So, if you own a home valued at $400,000, and you still owe $300,000 on the home, your total home equity loan cannot exceed $100,000. Whatever the value of your home may be (and how much you may qualify for in a loan), these are some of the benefits of a home equity credit line:
There are times where you need a large expense loan. Whether you need to pay sudden medical bills, are looking to purchase your teenager a car, but don’t have the available finances, or you want to add onto your current home, a home equity line of credit lets you tap into a potential large sum of money, which a traditional bank loan might not cover.
Low Interest Rate
While not always the case, in most instances, a home equity line of credit will come not only with a fixed interest rate, but with a lower interest rate than other forms of credit (including traditional loans and credit cards).
Potential Tax Deductions
In some instances, you may be able to claim the interest you pay on a home equity loan as a tax deduction. However, it does depend on what you used the loan for. So, make sure to talk with your tax accountant, or visit the IRS website to see what you can deduct from your taxes when using a home equity line of credit.
With a Home Equity Line of Credit, you have easy access to funds. Once your line of credit is approved, you won’t have to visit us every time you have a borrowing need. You simply access your line when you need it. We offer both competitive fixed and variable rates on our lines.
To find out more about how a Home Equity loan can help you, call or visit your nearest Heritage Bank location today.
Edward L. Taylor Jr currently serves as a Clayton County Business Banker with Heritage Bank. With over 15 years of experience in the banking industry, Ed can provide you with the best business products and services to serve your needs now and well into the future.
Vice President Business Banker • 770-515-7032 • [email protected]