Home equity
Home equity loan loans
One lump sum, one fixed rate, one end date.
What a Home equity loan loan actually is
A home equity loan is a closed-end second mortgage. You borrow a fixed amount at a fixed rate and repay it over a set term. There is no draw period, no variable rate and no payment shock at year ten. In exchange you give up flexibility: the money arrives once, and interest starts on the whole balance immediately.
It suits a defined expense with a known number. A roof replacement, a tuition bill, a debt consolidation with payoff letters already in hand. When the amount is uncertain or the spending is staged over a year, a HELOC is the better instrument, and we will say so.
Best suited to
- A single known expense such as a roof, a bathroom or a tuition bill
- Consolidating unsecured debt where the payoff figures are already confirmed
- Borrowers who dislike variable rates and want a fixed end date
- Anyone holding a first mortgage well below today's market
What comes with the loan
- Fixed payment schedule for the full term, issued before you sign
- Automated valuation where it qualifies, with a full appraisal only when needed
- Debt consolidation modeling with payoff letters ordered and verified
- Comparison against a HELOC and a cash-out refinance over your actual time horizon
- No prepayment penalty, so an early payoff costs nothing
- Mobile notary closing at your home or office
How a file moves
- 01
Define the number
A fixed second only makes sense when the amount is known. If it is not, we point you to a line of credit instead.
- 02
Combined LTV
First mortgage balance plus the new second divided by value, capped at 85% on a primary residence.
- 03
Underwriting
Credit, income and valuation. Median approval to closing is 15 business days (sample figure).
- 04
Closing
Mobile notary, with the three business day rescission on a primary residence.
- 05
Repayment
A fixed payment from month one to the end of the term, with no penalty for paying it off early.
Why borrowers choose it
Rate cannot move
Fixed for the full term, unlike a HELOC tied to Prime.
First mortgage untouched
Your existing first-lien rate and term stay exactly as they are.
A real end date
Five to twenty years, fully amortizing, with no balloon and no draw-period conversion.
No prepayment penalty
Pay it off in year two if you want. It costs nothing.
What to watch out for
- Interest begins on the full amount on day one, whether or not you have spent it.
- Two mortgage payments means two servicers and two escrow arrangements to track.
- Like any second lien, it must be paid or resubordinated when you refinance the first.
Home equity loan questions we get asked
Still unclear? Call (215) 555-0145 and ask for the originator covering your county.
All questionsA home equity loan gives you the whole amount at once at a fixed rate over a fixed term. A HELOC is a revolving line at a variable rate with a ten-year draw. Fixed suits a known expense; a line suits staged or uncertain spending.
Up to 85% of appraised value less your first mortgage balance, within a $20,000 to $300,000 range. On a $500,000 home with a $280,000 first mortgage that is up to $145,000.
Interest on home equity debt is generally deductible only when the funds are used to buy, build or substantially improve the home that secures the loan, and subject to overall limits. We are not tax advisers; take the specifics to yours.
There is no lender origination fee. Third-party costs, mainly title and recording, run $450 to $900 on a typical Pennsylvania file (sample range). We itemize them on the Loan Estimate.
Programs worth comparing
HELOC
Ten-year draw at Prime plus margin, interest only on what you use
Cash-out refinance
To 80% LTV on one unit, 75% on two to four units
Conventional
Conforming loans to $832,750 with cancellable PMI
Find out if Home equity loan fits
Fifteen minutes, a soft credit pull, and a straight answer about which program actually suits your file.
No application fee. Soft credit pull at pre-qualification. Flat $1,095 origination at closing.