Home equity loan

Do you need to tap into your home’s equity to pay for a home remodeling project or to pay off a credit card? A home equity loan is a fixed or adjustable rate loan that is secured by the equity in your home. With a home equity loan, you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. The terms home equity loan and second mortgage are often used interchangeably.

The process for a home equity loan is similar to your first mortgage. Although the the closing costs on a Home Equity Loan are usually lower than a first loan, you can choose to apply for a loan with no closing costs.  Although the interest rate is higher on a home equity loan, the interest paid is tax deductible.

To qualify for second mortgage, your credit must be in good standing. An appraisal might be required on your home to determine the home's market value.