The first type of home equity loan we offer is a Second Mortgage. This loan is delivered to the borrower in one lump sum at one time, with a fixed interest rate. This is very similar to a regular mortgage or auto loan. You get a specific amount and have to pay it back according to a set schedule. Second mortgages are usually the best choice when you know how much you need and want the ability to pay over a long period of time.
The second type of home equity loan we offer is a Home Equity Line of Credit (HELOC). This is a line of revolving credit with an adjustable interest rate, great for short-term borrowing or unexpected costs such as a medical emergency. The borrower can choose when and how often to borrow money. We will set a preliminary limit to the credit line, possibly giving the borrower access to up to 80% of the value of their home depending on credit history, less any liens. HELOCs have sometimes been compared to credit cards, in that you're given a limit. Paying off your debt will then free up more credit. Just like a credit card, you pay interest on the amount you borrow.
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