Home Equity
Each option changes cost, repayment, rate risk, and lien structure differently. Start with an educational comparison, then request a licensed review based on the property and intended use of funds.
A revolving line secured by the home. HELOCs usually have a variable rate, so payments may increase. Programs can include separate draw and repayment periods, minimum draws, fees, and a balloon payment. The line may be reduced or frozen under permitted circumstances and should not be treated as a guaranteed emergency fund.
A closed-end loan that generally provides lump-sum proceeds with a fixed interest rate and scheduled repayment. Upfront costs may apply. The home secures the loan and may be at risk if required payments are not made.
Replaces the existing first mortgage with a larger mortgage and may provide cash after payoff and costs. It can change the rate, term, payment, total interest, and lien structure, so it should be compared separately with HELOC and HELOAN options.
Home-secured debt: Failure to make required payments can result in default and foreclosure.
Educational Comparison
Using home-secured financing to pay unsecured debt can increase total borrowing costs and puts your home at risk if payments are not made. Compare alternatives and consider speaking with a qualified credit counselor.
Timing depends on the completed application, borrower and property documentation, valuation method, current program, and third-party requirements. An initial scenario review is not a loan decision or approval.
The valuation method depends on the program, property, available data, and underwriting requirements. An automated valuation may be available in some cases, but a physical appraisal cannot be assumed or promised in advance.
Usually, yes. A HELOC commonly has a variable rate. Changes in its index and margin can change the rate and payment, subject to the agreement's terms, caps, and applicable law.
Using home-secured financing to pay unsecured debt can increase total borrowing costs and puts your home at risk if payments are not made. Compare alternatives and consider speaking with a qualified credit counselor.
A licensed mortgage loan originator can compare available structures based on verified information. An initial review is not a loan decision, approval, rate quote, or commitment to lend.
Request a Program Review →