What is a home equity loan?

When you need to make repairs, cover unanticipated expenses or could use some extra capital, a home equity loan is a prudent financial choice.

With home equity loans Lexington SC homeowners have the financial freedom and flexibility to address short-term needs quickly.

What Is a Home Equity Loan?

A home equity loan lets you borrow against the value of your home over and above any mortgages owed on the property. They are often used for home improvement projects or repairs as a way of reinvesting in the residence.

A home equity loan is a type of second mortgage. Your first mortgage is the primary loan taken out to purchase the property. Second mortgages such as home equity loans also borrow against the property value.

With a home equity loan, you are using your home to guarantee the loan. If you are unable to pay back the loan, the issuer can place a lien on the property.

What Types of Home Equity Loans Are Available?

There are two basic types of home equity loans.

  • Lump Sum.¬†With a lump-sum loan, you receive cash up front and repay it over a period with fixed monthly payments. Usually, your interest rate is set at the start of the loan period and does not change.
  • Line of Credit. With a line of credit, you are approved for an amount of money that can be borrowed against incrementally as it’s needed. This arrangement lets you borrow multiple times while paying back the loan with monthly payments.

Do Credit Unions Offer Home Equity Loans?

At Palmetto Citizens Federal Credit Union, we offer three equity loan products:

  • A line of credit with no closing costs and low adjustable rates
  • A Visa Equity credit card secured by your home with no annual fee or property appraisal
  • Equity loans secured by an auto, RV or boat

Learn more about how Palmetto Citizens loan products can help you with the cash you need to tackle your home improvement projects.