You worked hard to build equity in your home–now, let your home equity work for you. A home equity loan is an affordable way to finance a home improvement project or other big expenses such as college tuition, wedding, dream vacation, and more. For more information on our home equity loan options, please contact one of our home loan specialists to learn more. You can also start the application process online.
- Competitive Rates
- Local Processing
- Quick Decisions
Equity refers to the difference between your home’s market value and your current mortgage balance. Homeowners build equity by making mortgage payments, improving and repairing aspects of the home, and living in a real estate market where prices are rising. Once you’ve built enough equity in your home, you can borrow against it at a low interest rate. Homeowners use home equity loans for a variety of things such as debt consolidation, home renovations, and more.
A Home Equity Loan is a fixed-term loan in which you receive the lump sum principal amount upfront and then repay what you borrowed, plus interest, in regular monthly installments. Because a Home Equity Loan is secured by the value of your home, you can borrow money at a lower interest rate than with an unsecured personal loan or credit card.
A HELOC is a revolving credit line, similar to a credit card. Instead of receiving a lump sum after opening a HELOC, you have a credit limit than you can borrow from when needed. There are two phases to a HELOC:
- Draw Period: When your HELOC is active, you can draw funds from the account when you need to. You can make interest-only payments or pay more toward the principal. Draw funds, pay back what you borrowed, and use the HELOC again.
- Repayment Period: Once the draw period is over, your remaining HELOC balance will be converted to a term loan that you repay in regular monthly installments. You can no longer draw funds from the HELOC account.
The choice between a second mortgage (Home Equity Loan) and a HELOC will depend on your specific situation and goals. For example:
A home equity loan is usually a better option than a home equity line of credit (HELOC) if:
- You know the exact amount that you need for a fixed expense.
- You’re financing a one-time expense (wedding, kitchen renovation, etc.).
- You want to consolidate higher interest debt.
- You live on a fixed income and need a set monthly payment that doesn’t fluctuate.
A HELOC is usually a better option than a home equity loan if:
- You need a revolving credit line to borrow from and pay down variable expenses, such as multiple smaller home improvement projects.
- You want a credit line available for future emergencies but don’t need cash now.
- Situations where you need access to funds at different or unpredictable times.
Not sure why type of home equity financing is right for you? Contact one of our home loan specialists to learn more. FVS Bank is conveniently located in the Fox Valley region of Wisconsin in Oshkosh, Waupun, and Fond du Lac. We offer repayment terms customized to fit your budget, friendly service from start to finish, and local decision-making and process. Ready to get started? Apply online today!