Life happens. At INSOUTH Bank, we know you can’t always be prepared for every situation life hands you. We know that even though you may have saved and prepared for the future that things happen. Perhaps you’ve had to use your emergency fund and now your daughter wants to get married. How will you pay for the wedding? Or how will you put the kids through college? Or you need to do some home renovations? How will you get it all done? These are the times that you may think about opening a Home Equity Loan or “second mortgage”.
A Home Equity Loan is a loan that is taken out based on the amount of equity in the home loan. If there is $40,000 in equity, then up to $40,000 can be borrowed. The home is used as collateral for the loan. If you cannot make your payments over time, your home could be lost to the bank. Unlike the Home Equity Line of Credit, this is a one time loan. These loans have fixed interest rates and are paid monthly until completed. Once the loan is paid off, it is closed. Also, when the house is sold, the borrower must pay back the loan in full.
There are certainly advantages to Home Equity Loans. This type of loan is much easier to get than a mortgage and the interest rates could be lower. Customers with poor credit may have an easy time of getting a loan like this. The interest costs may also be tax deductible. If you are responsible and make your payments each month, this is a feasible way to get the money you need easily.
If you want to talk to one of our INSOUTH Bankers about a Home Equity Loan, don’t hesitate to call with your questions!
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