Home Equity Loan Series Part 4: What You Need to Know

There are advantages to getting a home equity
loan, as opposed to taking out other types of loans. One of the biggest benefits is that home equity
loans typically have lower interest rates than those for auto, personal loans, and credit
cards. Home equity loans can also help improve your
credit score by giving you a better mix of credit types. Plus, the interest paid on a home equity loan
may qualify for a tax deduction – you’ll want to check with your tax advisor to know
for sure. Many people don’t realize that a home equity
loan can be used to refinance a mortgage. At Veridian, for instance, we offer a 10 & Done
Loan, which allows homeowners to refinance their mortgage balance – using the equity
in their home – at a low, fixed rate for 10 years. For every advantage, there’s usually a disadvantage.
Home equity loans are no different. Your home is the “collateral” on a home
equity loan. This means that if you fail to make your payments on the loan, you are at
risk of losing your home. If you encounter difficulty making payments, please know that
trusted lenders like Veridian will make every reasonable attempt to find a solution for
you. It’s also possible that a home equity loan
could have a higher interest rate than a traditional mortgage rate. Even if that’s the case,
a home equity loan could still make more sense because closing costs and fees on a typical
mortgage refinance can easily cost thousands, while closing costs and fees on a home equity
loan are often less than $200 total. Check out the rest of our home equity video

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