Home Equity Loans
What is a Home Equity Loan?
If you owe less than your home is worth, and you’ve built up enough equity in your home, you can apply for a home equity loan, also known as a second mortgage. This is a loan taken out in addition to your mortgage, and it’s supported by the value of your current home.
How Home Equity Loans Work
Home equity loans are secured loans, because they are financially anchored by your house’s value. Because the credit union owns your home (until your mortgage is paid off), they also have the right to foreclose on your home if you stop making payments. But how does this apply to home equity loans?
- If you stopped making payments on your home equity loan, the credit union would foreclose on your home, because your home is guaranteeing the loan.
- This makes home equity loans a serious decision, and one that homeowners should consider carefully.
Why Choose a Home Equity Loan?
Home equity loans don’t have to be used for the house itself--they can be used in a multitude of different ways! But remember: home equity loans are a second mortgage, and they need to be used in a financially-wise way. Here are some ways our members use their home equity loans:
- To renovate, remodel, or otherwise improve the house or property.
- To purchase a second home, or additional land.
- To fund a family member’s college education.
- To consolidate debts with high-interest.
Home Equity Loan Rates with People’s
When you apply for a home equity loan with People’s Community Federal Credit Union, you’ll get the same rate as everyone else. Your credit does determine approval, but we’re typically more flexible than bigger banks. While we can’t approve loans if you have lower levels of credit, we can work with you to figure out a home equity loan solution that works for you and your budget. At People’s Community, you’re a person--not a number!