Home Equity Loans are typically a second lien or junior lien against the property to the first mortgage. A Home Equity Loan allows you to borrow to a predetermined loan to value based on equity established in the property. A Home Equity Loan can also be used to help offset down payment in a purchase. Unlike a HELOC, you cannot reuse the Loan as you pay down the balance of the mortgage.
Guidelines and Parameters
Features for Home Equity Loans
- Fixed Rate
- Fixed Loan duration based on almost any amortization schedule. The longer the amortization schedule the more likely there is a balloon in place s that the mortgage payoffs earlier.
- Funds can be used for anything once the loan is established
- Interest paid is tax deductible
- Maximum loan is based on loan to value or the equity available in your property. Most Equity Loans will have a loan amount cap.