Home Equity Loans
Refinance & Equity
Home Equity Loans
A home equity loan provides a lump sum secured by your home's equity, with a fixed rate and predictable monthly payments — different from a revolving HELOC or a cash-out refinance.
Who May Benefit
- Homeowners who want a fixed payment for a specific purpose
- Those who want to keep their existing first mortgage rate
- Borrowers funding a defined project with a known cost
- Those who prefer predictable payments over a revolving line
- Homeowners with significant equity and strong credit
How It Generally Works
A home equity loan (also called a closed-end second mortgage) gives you a fixed amount at closing, repaid over a set term at a fixed interest rate. Unlike a HELOC, you receive all funds upfront and cannot draw additional amounts.
Unlike a cash-out refinance, a home equity loan does not replace your first mortgage — it sits as a second lien. This can be advantageous if your first mortgage has a favorable rate you want to keep. Eligibility depends on available equity, credit, and lender requirements.
Key Considerations
Fixed Rate and Payment
Home equity loans typically have fixed interest rates and fixed monthly payments, making budgeting predictable. Unlike a HELOC, your rate does not change after closing.
Second Lien Position
A home equity loan is a second lien on your property, separate from your first mortgage. Both loans must be repaid if you sell or refinance.
Lump Sum at Closing
You receive the full loan amount at closing. Unlike a HELOC, you cannot draw additional funds later. Borrow only what you need, as you pay interest on the full amount from day one.
Equity Requirements
Lenders limit the combined loan-to-value (CLTV) of your first mortgage and home equity loan. Available equity, credit, and lender guidelines determine how much you can borrow.
Home equity loans are second liens on your property. Eligibility depends on available equity, credit, and lender requirements. All loans subject to credit approval.
Frequently Asked Questions
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