Home Equity Loans, Des Moines, IA | Premier Credit Union

Considering a Home Equity Loan in Central Iowa?

Home Equity Loans Published November 22, 2023

Home Equity Loans, Des Moines, IA | Premier Credit Union

Considering a Home Equity Loan in Central Iowa?

Home Equity Loans and Home Equity Lines of Credit. What’s the difference?

First things first! Let’s define these two products. Each are based on the equity (the difference between what you owe on your mortgage loan and the current value) of your home. Each product will use your home as collateral. A home equity loan is a loan that provides you with an amount of money up front. These types of loans have fixed interest rates, which typically result in a fixed payment throughout the life of the loan. A Home Equity Line of Credit (HELOC) is a line of credit you have access to that is determined by the equity in your home. This loan offers flexibility by allowing you to pay back and then borrow again as needed. It will also have a variable interest rate. Think of both as a second mortgage on your home!

What credit score is needed for a home equity loan?

Again, the higher your credit score is, the better chance you have of securing a lower interest rate. This will come in handy as your monthly payments will be less as well! Another important factor is the Loan to Value (LTV) that you are considering. In most cases you are allowed to borrow up to a certain amount of your home’s value as a percentage – which will in turn impact the interest rate you receive. On top of that, your rate will also be determined by the length of time you take the loan out for.

Wow, we’ve covered a lot already! But that’s where we come in. Premier Credit Union’s Home Equity Experts have been doing this for a long time. They know what they’re talking about! We’re here to make the process simple, fast and efficient – so you can get your project moving faster!

How much would a $50,000 home equity loan cost per month?

From what we learned above, every situation and every home equity loan can be different based on several factors. We can approximate amounts but the best way to get an accurate estimate is to contact Premier Credit Union today. A payment example could look like this: A $50,000 home equity loan paid off over 180 months (15 years) at 7.00% APR* would come out to roughly $449.00 per month.

Are there downsides to a home equity loan?

Home Equity Loans can be a great way to tackle a large project such as a new deck or new kitchen. Or to make major repairs before you sell your home to get the maximum value for it. They can even serve as a bridge between selling a current home and buying a new one, to ensure no payments are missed. Debt consolidation is another handy use if applied correctly. These types of loans generally see lower interest rates than credit cards or even unsecured loans.

However, please be diligent in how much you are borrowing and what your payment plan is. Credit Cards and other similar loans can result in major debt from the interest you owe. But with home equity loans, not being able to pay the loan off could result in you losing your home. Something you definitely want to avoid! Contact Premier Credit Union today to find out which type of loan suits your situation best, and how much you can afford. Every situation is different, but we will help find a solution that will Make Life Better for you!

About us:

Premier Credit Union is a full-service financial institution serving Central Iowa, with branch offices in downtown Des Moines, Urbandale, West Des Moines and Ames. At Premier, our mission and reason for existing is to Make Life Better for you, our member!

*APR = Annual Percentage Rate

 

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