Are Home Equity Loan Rates Fixed?
Yes, home equity loans are typically fixed interest rate loans for a fixed amount of money for a fixed term. You repay the loan with equal monthly payments over your chosen loan term. Just as the name implies, home equity loans are secured by your home. It serves as a guarantee on the loan. Your home’s equity is the portion of your home that you’ve paid off. It’s the difference between what the home is worth and how much is still owed on your mortgage or existing home loan. If you need money, a home equity loan has many benefits, including that low fixed interest rate.
Fixed-rate home equity loans
Home equity loan fixed interest rates are often lower than credit cards or other unsecured consumer loans. This makes them ideal for larger expenses, such as home renovations, college tuition, debt consolidation, emergency expenses, or other major expenses. The fixed interest rate ensures a monthly payment that stays the same over the life of the loan. Because the loan is secured with your home, it may also enable you to borrow a substantial amount of money. The amount you borrow is provided to you in one large lump sum. The fixed rate provides predictable payments, which always makes budgeting much easier.
In order to take advantage of a home equity loan, you’ll need to go through a process similar to a mortgage loan. Qualification requirements vary from lender to lender. You’ll need to have a certain percentage of equity available in your home, a good credit score, as well as an adequate debt-to-income ratio. Keep in mind that your existing mortgage and any existing home equity loans or home equity lines of credit will factor into your available equity. As we mentioned above, different lenders may let you borrow more of your home’s equity than others. Read on to learn about Spirit Financial Credit Union’s low-rate home equity loan features.
Spirit Financial Credit Union 1st Lien Home Equity Loan
Spirit Financial in Levittown, PA is currently offering a home equity loan rate as low as 4.65% APR** on a first-lien home equity loan. In addition to that low, fixed interest rate, borrowers will benefit from no closing costs. That can be a significant savings when borrowing against the equity in your home. It can make it a good option for refinancing as well. Spirit Financial also enables eligible homeowners to borrow up to 90% of the value of their homes.** There are also a variety of fixed repayment options from which to choose. You can learn more about Spirit Financial home equity loans, view current rates for different terms, and apply right online. Interested in a Spirit Financial home equity loan, but not a member? Membership is open to anyone who lives, works, worships, or attends school anywhere in Bucks County, PA. You are also eligible for membership if you are a family member of an existing Credit Union member or if you are employed or have been employed with our original sponsor group, U.S. Steel.
Compared with other loans, home equity loans will almost always have a competitively low-interest rate. Lower, fixed interest rates can mean more affordable monthly payments. While home equity loan funds can be used for any purpose, the interest is only deductible in certain instances. The interest may be tax-deductible, for instance, if it was used specifically for certain home improvements. Contact your tax advisor for information as to the tax-deductibility of your home equity loan interest or visit irs.gov to learn more. Also, keep in mind that your home secures your loan, so foreclosure is possible if you default on your loan. For more information on Spirit Financial Credit Union’s home equity loans, speak to a loan representative, or visit us online at spiritfinancialcu.org.
**APR= Annual Percentage Rate. Rates are for qualified borrowers and are based on the credit worthiness of the individual and loan being in first lien position. Actual rates may be different than the rates shown. For LTVs over 80%, 1.25% will be added to the rate.