Home Loans

The Ins and Outs of a Home Equity Loan

If you’re a homeowner, there are significant benefits to using your equity as a low-cost source of credit. It’s versatile and offers a convenient way to finance any need. 

How It Works:

Using your equity as collateral, you’re rewarded with an excellent rate and lucrative borrowing amount. You can also take up to 15 years to repay, so payments stay manageable. And depending on how you use the funds, you may possibly offset some of the cost with a tax deduction. (See your tax advisor for details.)

Count On A Low Rate:

A fixed-rate home equity loan offers a set rate, amount, and term for your loan. It works well for just about any project or purchase, a special event or another opportunity. You can even use your equity to pay off your first mortgage!

More Borrowing Power:

At Valley 1st Community Credit Union, we offer financing amounts up to 85% LTV (loan-to-value) of your home, up to $150,000.

For example:

$100,000 home’s appraised value

X  .85 LTV

= $85,000    

- $50,000 existing mortgage

= $35,000 available borrowing amount

Potential Tax Benefits:

Homeowners may be able to recoup some of the cost of their home equity loan at tax time — depending on how they use the funds. According to IRS.gov, home equity interest may still be deductible in 2020 if the home equity proceeds are used only to “buy, build or substantially improve a taxpayer’s home that secures the loan.” However, we always encourage you to consult your tax advisor.

Ready To Get Started?

You can apply in-person, by calling or clicking here.

Source: IRS.gov.