Loan types
A home equity loan when you want a fixed lump sum.
A home equity loan pays out once, usually at a fixed rate and a fixed payment. It sits in second position behind your current mortgage unless that mortgage is paid off.
Who it is for
- Owners who know the amount they need
- Borrowers who want a fixed payment instead of a variable line
- People who would rather leave a low-rate first mortgage untouched
How it usually works
- You receive the funds at closing and start repayment right away.
- The rate is usually fixed for the term you choose. Closing costs and the second-lien position both affect the offer.
- If you might need more money later, a HELOC is the product to compare. If you want one check and one payment, this is the simpler one.
What to have ready
- Mortgage statement
- Home value estimate
- Income documents
- The amount you want to borrow and what it is for
Guidelines change, and lenders add their own rules. The description above is a starting point, not a quote and not an approval.