Get a no-cost quote on home equity loans with fixed rates and predictable payments.
A home equity loan allows you to borrow against the equity you've built in your home, receiving a lump sum of cash with a fixed interest rate and predictable monthly payments. Unlike a HELOC (Home Equity Line of Credit) which works like a credit card, a home equity loan gives you all the funds upfront with a set repayment schedule.
Home equity loans are often called second mortgages because they're secured by your home in addition to your primary mortgage. Because they're secured by real estate, home equity loans typically offer lower interest rates than personal loans, credit cards, or other unsecured borrowing options.
Whether you're consolidating high-interest debt, funding home improvements, paying for education, or covering major expenses, a home equity loan provides predictable financing with the stability of fixed payments.
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Here's how the home equity loan process works:
Most lenders allow up to 80 - 85% combined loan-to-value. In Texas, homestead home equity loans are capped at 80%. For example, If your home is worth $400,000 and you owe $250,000, you may be able to borrow up to about $70,000 (at 80% combined loan-to-value).
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A home equity loan provides a lump sum with a fixed rate and fixed monthly payments - you get all the money upfront and pay it back over a set term. A HELOC works like a credit card with a variable rate and a credit line you can draw from as needed during a draw period. Choose a home equity loan when you need a specific amount for a one-time expense; choose a HELOC when you want flexible access over time.
Most lenders allow you to borrow up to 80-85% of your home's combined loan-to-value (CLTV). Calculate by multiplying your home value by 0.80 or 0.85, then subtract your current mortgage balance. Some lenders offer up to 90% CLTV for well-qualified borrowers.
Interest on home equity loans may be tax-deductible if the funds are used to buy, build, or substantially improve the home securing the loan. Interest on funds used for other purposes (debt consolidation, education, etc.) is generally not deductible under current tax law. Consult a tax professional for your specific situation.
Home equity loans typically offer terms of 5, 10, 15, 20, or 30 years. Shorter terms mean higher monthly payments but less total interest paid. Longer terms reduce monthly payments but increase total interest cost. Choose a term that balances affordable payments with your payoff goals.
Most lenders require 620+ credit scores, with 680+ for competitive rates. If your credit is below 620, you may still qualify with some lenders but expect higher rates. Consider improving your credit before applying, or explore FHA cash-out refinancing which may have more flexible credit requirements.
Common uses include home improvements and renovations, debt consolidation, education expenses, emergency medical costs, major purchases, and business funding. Unlike some loan types, home equity loans don't restrict how you use the funds - though tax deductibility depends on the use.
Important Disclosure
Home equity loans subject to credit approval. Your home serves as collateral - failure to repay could result in foreclosure. Rates, terms, and maximum loan amounts vary by creditworthiness, property value, and lender guidelines. Property appraisal required. Tax deductibility of interest depends on how funds are used - consult a tax professional. Combined loan-to-value limits apply. Rates and terms subject to change without notice. This is not a commitment to lend.
