Home equity loans are loans that use the home in question as collateral. The loan is often used for house repairs or other major purchases.
Home equity loans in Melrose Park and surrounding cities are on the rise. They are gaining popularity with homeowners as a hassle-free way to pay over time a large sum of money. There are two types of equity loans that will be explored further.
Home Equity Loan
The regular home equity loan is where a lump sum is borrowed from the lender. It is a fixed rate where you also get to keep your mortgage payments. Fixed rate means the interest percentage will always stay the same, therefore you monthly payment will not change either. Home equity loans also come with different term lengths. From around 5-20 years, there are lots of options here. Note that you cannot borrow against the loan once you are approved.
Home Equity Line of Credit
With a home equity line of credit, you borrow a certain amount over a lender approved timeline. You use the approved money as you need it and as you pay the principle, your credit restores or revolves and you can use that money again and again. There is more wiggle room than the standard home equity loan. The interest percentage in this situation, however, would not be fixed. With a variable rate and how much money you have used, monthly payments will vary from month to month. You would need to decide if this is too much of a risk for you.
Just like with any loan and borrowing of money, always make sure you will have the means to pay the loan back. The loan is similar to a mortgage where you would need to make monthly and timely payments or be in default. Figure out which loan works best for you and reach out to your local lender to apply.
If you are looking for home equity loans in Melrose Park and surrounding areas, contact Leyden Credit Union.
