What are the Benefits of a Rivermark Home Equity Loan?
Having a home leads to a number of stresses, many of them financial. One option to consider is a home equity loan. But how do you know if this is right for you? Read on to find out more about home equity loans and to see the reasons why getting one from Rivermark Credit Union will give you the most benefits.
What Is a Home Equity Loan?
This is a loan where the borrower uses the equity of their home as collateral. Some may refer to a home equity loan as a second mortgage. If you’re approved for this loan, you’ll receive a lump sum of cash upfront.
Perhaps the most attractive benefit of home equity loans is that they can provide a large amount of money in a short period of time. And the recipient is typically paid this lump sum in cash. Overall, a home equity loan can be one of the biggest sources of net worth for property owners. It’s an easy way to get a large amount of money as well.
By taking out this loan, of course, you’re promising to pay it back someday. Different lenders will offer different time periods for repayment. Rivermark Credit Union, for instance, offers 5-, 10-, 15-, and 20-year repayment options. If you fail to pay back the loan, however, your home will be repossessed by the lender. If you decide to sell your home before this period is over, you’ll have to pay the loan back in full.
How Do You Know What Your Home Equity Is? And How Much Will the Home Equity Loan Be?
The amount you receive for a home equity loan will be determined by the value of the property. Over time, your home can increase its value, so the amount of your equity will increase then as well.
You can figure out your equity by subtracting your mortgage balance from your home’s current appraised value. We have a home equity calculator on our website. If you’re not sure of the current value of your home, a site like Zillow can give you a healthy estimate.
One of the benefits of receiving a Rivermark home equity loan is that we offer more than most other lenders. When you get a home equity loan from Rivermark Credit Union, you may be able to borrow up to 95 percent of your total home equity amount. Most other lenders, however, will not offer more than 80 percent.
What Can You Use the Loan For? Whatever You Need!
People consider taking out a home equity loan because they want to use it for a major expense. What you plan to use the money for will not affect whether you’re approved for the loan. The most common use for this loan is home repairs and renovations. You’ll be able to put the money you’ve paid for your home back into it. The money you get from this loan can also be used for investments, retirement income, college tuition, medical bills, debt consolidation, and more. At the same time, however, you want to make sure you only spend the money responsibly.
Benefits Compared to Other Loans
When you decide to take out a loan, you still have to worry about whether or not you’ll qualify for it. But home equity loans are typically much easier to qualify for than other types of loans. This is because you’re borrowing against the value of your home, so it’s secured by your property. If you have equity, that’s usually enough.
Another benefit is that home equity loans have lower interest rates than other loans, such as personal or credit loans. This is because it’s a type of loan where you have collateral. With personal loans, on the other hand, there’s no collateral.
Rivermark home equity loans and home equity lines of credit have no annual fee or prepayment penalties. You’re able to repay the loan with fixed monthly payments. The consistency of this makes it much easier to have a steady monthly budget.
If you’re using a home equity loan specifically for home renovations, there are even more benefits available. In the case of home renovations, the interest you pay on the loan can actually be tax-deductible, so the loan will be removed from taxable income. However, this will not be available if you use the loan for something unrelated to your home. You can talk to a tax professional to find out more about this possibility.
Rivermark Also Offers Home Equity Lines of Credit
Rivermark knows that one option won’t suit everybody’s needs. A home equity line of credit, also known as HELOC, is a great option for those who want to use their equity as an emergency fund. Or one great way that a HELOC can be used is for paying short-term and recurring costs.
A home equity loan is especially beneficial when you have something specific in mind to use the money for. But if you don’t, the HELOC might be a better choice.
With a HELOC, you won’t receive one large sum. Instead, you’ll have a line of credit, which will be easily accessible. After you’re approved, you can just take out money from that line of credit. You can take out whatever amount of money you need, whenever you need it. So it’s a very flexible loan. It’s somewhat similar to a credit card. And instead of a fixed rate, you’ll only be paying interest on the money you take out from this credit.
Rivermark provides a 10-year draw period for a HELOC, and the repayment period can be up to 15 years.
Take the time to consider which option is best for you, a home equity loan or a HELOC.
You can find additional information about Rivermark home equity loans, as well as so much more, on our website. You can apply for a Rivermark home equity loan on our website as well. And feel free to contact us if you still have any questions or concerns about home equity loans.