Home equity loans - Sunset Mortgage Company

Home equity loan

Do you need to tap into your home’s equity to pay for a home remodeling project or to pay off a credit card?

A home equity loan is a fixed or adjustable rate loan secured by the equity in your home. With a home equity loan, you against the equity with monthly payments to be repaid over a set time frame, much like a first mortgage.

The terms home equity loan and second mortgage are often used interchangeably and in confusing fashion by inexperienced loan officers and confused borrowers.

The process for a home equity loan is similar to your first mortgage. The closing costs are usually lower and, although the interest rate may be higher on a home equity loan, the iinterest paid is tax deductible, with some notable exceptions. As a CMPS (Certified Mortgage Planning Specialist), Sam Croskell and his TEAM can provide you guidance as to expected tax ramifications.

Second mortgages and home equity loans were once easy to obtain. In fact, first mortgages are now far easier to obtain than mortgages secured by home equity. Credit guidelines are often more stringent and CLTV's (combined loan to value), total debt secured by loans, have been lowered. It is more important than ever to utilize the services of an experienced professional to properly design your mortgage lending needs.

An appraisal may be required to complete the home equity loan process and documented income and assets will gain more favorable rates.