Funds from an equity home loan can be used for many purposes |
An equity home loan is a loan borrowed against the equity in your property.
Your borrowed funds can be used for any reason — cash on hand for investments, debt
consolidation, home improvement, to start a business, and more. And equity home loans
also provide the same tax benefit as traditional mortgages.
Equity home loans are best if you already have a low interest rate on your existing
1st trust deed loan, and do not wish to pay it off by refinancing but would still like
to pull all the cash out of your home equity.
Two types of equity home loans
There are two types of equity home loans:
- A home equity loan can be a traditional 2nd trust deed, where you borrow against the
equity in your home and get all your monies up front.
- Or your equity loan can be a line of credit against your property. This line of credit
is also a 2nd trust deed; however it works like a credit card,
in that you have a maximum credit limit, and your payment is based upon the amount that
is used.
Equity home loans usually require strong credit and fully documentable income.
A traditional equity home loan will have a fixed rate and will normally have terms of
20, 30 or 40 years. The home equity line of credit will
have either an adjustable rate or an interest-only rate.
Need a loan against the equity in your home? Call us today for a free, no-obligation
loan consultation. |
