Questions about Home Equity Loans?
We have answers.
General Questions about Home Equity Loans
What is the difference between a Home Equity Loan and a Home Equity Line of Credit?
With a Home Equity Loan, you’ll receive your lump sum, usually with a fixed interest rate. A Home Equity Line of Credit (HELOC) is similar to a credit card. You can borrow or draw money multiple times from an available maximum amount. You only pay interest on the amount you borrow, not the total available.
Here’s a great article that explains the differences between a Home Equity Loan and Home Equity Line of Credit in more detail.
How do you come up with a value for my home?
We use a “home appraisal” as a comprehensive report to determine the value of your property based on a number of factors, ranging from footage of living space to the view and the year a property was built. An appraisal will also make sure you’re not paying more than the house is worth.
How much can I borrow on a HELOC?
Generally, you may be able to borrow up to 90 percent of your available equity. Contact a loan officer to see how much you can borrow with a Home Equity Line of Credit.
How can I use the funds from my HELOC or Home Equity Loan?
Many homeowners use their funds for major home renovations or improvements to increase the value of their home. You may choose to pay off high-interest debt, medical bills, or tuition fees. Contact a loan officer to learn more.
Home Equity Loans and Home Equity Line of Credit Interest Rates
Is the interest rate on Home Equity Loans or HELOC variable or fixed?
Home Equity Loans are typically fixed for at least the first few years, if not longer, while HELOCs often come with variable interest rates. Contact a loan officer to learn more about the current rates for both.
Is the interest on Home Equity Loans and HELOC tax deductible?
Consult a tax advisor as to deductibility of interest for any type of mortgage loan.
Home Equity Loans and Home Equity Line of Credit Process
What information do I need in order to apply for a Home Equity Loan or HELOC?
The standard documents you’ll need when applying for a Home Equity Loan or HELOC are as follows:
- Past 30 days of pay stubs
- Past 2 years of W2s
- Past 2 years of federal tax returns – self-employed borrowers
- Past 2 months of bank statements
How long does a Home Equity Line of Credit stay open?
A Great Midwest Bank HELOC is open for ten years. The outstanding principal is due and payable at the end of that ten-year timeframe. Contact a loan officer to learn more.
How do I access the funds from my Home Equity Line of Credit?
Funds can be accessed directly at branch location or online. Simply withdraw or transfer as needed.