Home Equity Loan
A fixed-rate second lien on the equity you've built.
A lump-sum, fixed-rate loan secured by your home's equity, with predictable monthly payments.
What is a Home Equity loan?
A home equity loan (second mortgage) provides a lump sum secured by your home's equity. Payments are fixed for the loan term, offering predictable budgeting.
Designed for
Homeowners who need a specific amount of money and prefer fixed payments over a HELOC's variability.
Why choose it
Predictability. Fixed rates and payments make budgeting straightforward.
Common use cases
- ◆Large one-time expenses
- ◆Debt consolidation
- ◆Major renovations with defined budgets
- ◆Education funding
Built for borrowers who look like this.
Budget-focused homeowners
Want predictable, fixed payments.
Debt consolidators
Paying off higher-interest balances.
Renovators
With a defined project cost.
Life-event planners
Tuition, weddings, or medical costs.
The advantages.
Fixed rate
Payments stay level for the life of the loan.
Lump-sum funding
Full amount disbursed at closing.
Preserves first mortgage
Your original mortgage rate stays in place.
Longer terms available
Amortization schedules commonly range up to 20+ years.
Things to weigh.
Full balance from day one
Interest accrues on the entire lump sum immediately.
Home as collateral
Foreclosure risk with non-payment.
Rate premium vs. first mortgage
Second liens typically price higher than first mortgages.
Fees may apply
Closing costs vary by lender.
What lenders generally look for.
Requirements vary based on lender guidelines and borrower qualifications. The below is educational — not a commitment or offer of credit.
- Equity
- Meaningful home equity required
- Credit expectations
- Varies by lender
- Documentation
- Traditional income and asset review
- Occupancy
- Primary residence most common
Answers to what borrowers ask most.
How is a home equity loan different from a HELOC?
A home equity loan is a fixed-rate lump sum. A HELOC is a revolving variable-rate line.
Can I use the funds for anything?
Yes, though many borrowers use it for renovations or consolidation.
Is the interest tax deductible?
Possibly, when funds are used for home improvements. Consult a tax advisor.
Are rates fixed?
Yes, home equity loans have fixed rates.
What terms are available?
Terms commonly range from 5 to 30 years.
Do I need to refinance my first mortgage?
No, this is a second lien.
How much can I borrow?
Based on available equity, credit, and lender guidelines.
Can I pay it off early?
Usually yes; check for prepayment terms.
Are closing costs required?
Typically, though they're often lower than a full refinance.
Can I use it for investment properties?
Program availability varies.
Home Equity Loan Guide
Fixed-rate second mortgages, in plain terms.
Run the numbers.
Educate yourself.
Complementary programs worth exploring.
HELOC
A revolving line of credit secured by your home's equity, letting you draw funds as needed.
Explore HELOC loan requirementsConventional
A traditional mortgage backed by Fannie Mae or Freddie Mac guidelines, offering competitive rates and flexible terms.
Explore Conventional loan requirementsRenovation
Combined financing for buying and improving a home, folded into one streamlined mortgage.
Explore Renovation loan requirementsAsk about Home Equity.
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