Borrowing against the equity in your home can have advantages over other types of credit. The interest is typically lower and tax deductible, for starters. So what types of loan options are available to you?

Home Equity Loans can come with fixed rates of interest and terms up to 30 years. These loan types are best suited for someone who knows exactly how much money they need and want the security of knowing exactly what their monthly payment will be.

Home Equity Line of Credit (HELOC) When you’re planning a project and don’t know how much money you’ll actually need, a HELOC may be your best bet. A HELOC provides a credit line in which you can borrow from at any time for any reason. You can pull money from the account as you need it and make interest only payments on just the amount borrowed each month.

The interest rate is tied to Prime rate and can generally range from 0% to 4% above prime on average depending on the size of the line, the percentage of equity your borrowing against, and your credit score. Often times, these loans can be arranged with no closing costs and some have fixed rate conversion options too.

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