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Home Equity = Borrowing Power


Sometimes, big plans come with a big price tag. Maybe you want to renovate your kitchen, fund a special event such as a vacation or wedding, or even consolidate your debt into one easy payment. If you’re a homeowner, you have access to a powerful tool to make it happen: home equity.

What is home equity?

Home equity may sound complicated, but it’s simple. Equity is the positive difference between what you owe on your mortgage and what your home is currently worth. For example, let’s say your home is worth $200,000, and you still owe $150,000 on your mortgage; you now have $50,000 in built-up equity.

How to access home equity?

Traditionally, there are several ways to access your home equity:

  • Home equity loan
  • Home equity line of credit (HELOC)
  • Cash-out refinance
  • Sell your home

However, one of the easiest ways to access your equity is through a home equity loan.

What is a home equity loan?

A home equity loan is a loan secured by your home’s value: meaning your original down payment, what you’ve paid toward the principal in your monthly mortgage payments, and home appreciation.

Your lender will determine how much you can borrow by looking at factors such as your income, debt-to-income ratio, the value of your home, and your credit history.

Once a loan amount is determined, you’ll begin making monthly loan payments in addition to your regular mortgage payments.

What are the benefits of a home equity loan?

You can enjoy many benefits from a home equity loan, but here are our top three.

  • Low interest rates.1 Because home equity loans are secured forms of credit, they typically have lower interest rates than unsecured loans.
  • Predictable. Unlike personal loans, credit cards, or other unsecured debt, home equity loans typically have fixed repayment terms as well as fixed monthly payments. This means you’ll know exactly how much you’ll have to pay each month and when your loan will be paid off. You’ll likely have a fixed interest rate, too, meaning your interest rates will never change.
  • Tax incentives: The interest paid on a home equity loan is often 100% tax-deductible when used for home improvements.2

How to use a home equity loan?

Your home equity loan can be used to accomplish a number of financial goals. Most often, funds are used for home improvements, debt consolidation, emergency expenses, wedding costs, vacation expenses, and long-term investments. The real question is—what will you do with your home equity funds?

Get Started Today! It’s Easy.

If you’re interested in taking out a home equity loan, now is a great time to do so. To find out how much you can borrow and what rates, terms, and payment options apply to your personal situation, apply online now.

Get Started Now. It's Easy!

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Call us at 800.456.3000 or visit your local branch.