If you’re a homeowner with some renovation projects in mind or would like some extra cash flow for debt consolidation or college tuition, enter the Home Equity Loan. If you missed the pandemic’s low housing rates, refinancing probably isn’t on your mind – keep the rate you have on your current first mortgage.

A home equity loan, however, is a second mortgage on your home. There are two options: a fixed-rate home equity loan with a set term, ranging from five to 15 years and a variable-rate line of credit, similar to a credit card, but the limit is based on the equity in your home. While interest rates aren’t necessarily lower than a traditional mortgage, they are most likely lower than other loan options like personal loans and credit cards.

A fixed-rate home equity is a term loan where you borrow a set amount and receive it all as a lump sum after closing, into your account or in the form of a check. Your established payments will never change as the rate and term is agreed upon before you sign your loan paperwork. Once the loan is paid off, you would need to reapply for another should you need more funds using the equity in your home.

A home equity line of credit, or HELOC, is a revolving loan, like a credit card, where you only pay on the amount that you have borrowed. The line of credit can be a great emergency fund, as there is no penalty should you not borrow against it and even after you pay it all back, it’s available for you to borrow from for years to come. Payments won’t be the same each month as it changes with the balance you carry.

A benefit to using the equity in your home is that the funds can be for whatever you need as a homeowner. Renovations, additions, school tuition, car repairs, furnaces, emergency savings, debt consolidation, and the list goes on! Our local loan officers can help you decide which product would best fit your needs – give us a call today! They’re on the phone Monday to Friday from 8 am to 6 pm and Saturdays (just in time for your weekend honey-do conversations) from 9 am to 1 pm and can be reached at 866.80.LOANS. You can also easily apply online at nefcu.com! We look forward to helping you!