Union Bank
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Home Equity Loan

Ready to unlock your home equity potential? Whether you’re looking to fund a significant home renovation, pay for college tuition, or consolidate high-interest debt, a home equity loan might be the right choice for you.

A Home Equity Loan is a popular financial tool that allows you to borrow money using your home’s equity as collateral. Equity is the difference between your home’s current market value and the outstanding balance of your mortgage. Unlike a Home Equity Line of Credit, a Home Equity Loan provides you with a lump sum of money at closing, that you’ll repay in fixed monthly installments over a predetermined term.

Some of the requirements for a Home Equity Loan include a satisfactory credit score, a stable income source, and an acceptable loan-to-value (LTV) ratio. The LTV ratio is the percentage of the home’s value that is being financed by the loan, and it varies depending on the lender’s guidelines.

At Union Bank, we understand the unique financial needs of homeowners in Vermont and New Hampshire.  We are committed to providing competitive Home Equity Loan options with flexible terms and attractive rates.

Ready to get started?  You can get started online by using our online mortgage application today,  or get in touch with our knowledgeable mortgage lending team for personalized assistance. We’re eager to help you explore the benefits of Home Equity Loans and provide you with the resources and support you need to make an informed decision.

Frequently Asked Questions About Home Equity Loans

  1. What is the difference between a Home Equity Loan and a Home Equity Line of Credit (HELOC)?

    A Home Equity Loan provides a lump sum of money, with a fixed interest rate and repayment term. A Home Equity Line of Credit (HELOC) is a revolving credit line with a variable interest rate, allowing you to borrow money as needed up to a pre-determined limit.

  2. How much can I borrow with a Home Equity Loan?

    The amount you can borrow depends on factors such as your credit score, income, and the equity in your home. Typically, you can borrow up to 80% of your home’s value, minus your outstanding mortgage balance.

  3. What can I use the funds from a Home Equity Loan for?

    You can use a Home Equity Loan for a variety of purposes, including home improvements, debt consolidation, education expenses, or medical bills. However, it’s essential to use the funds wisely, as your home serves as collateral for the loan.

  4. Are the interest payments on a Home Equity Loan tax-deductible?

    In some cases, the interest paid on a Home Equity Loan may be tax-deductible. It’s crucial to consult with a tax advisor to determine if you qualify for any tax deductions.

  5. How long does it take to get approved for a Home Equity Loan?

    The approval process for a Home Equity Loan varies, but it typically takes several weeks. Factors such as the complexity of the application, property appraisal, and title search may impact the timeline.

  6. Are there closing costs associated with a Home Equity Loan?

    At Union Bank, there are typically no closing costs associated with a Home Equity Loan. Occasionally, there are times where the appraisal and title work are at the borrower’s expense.

  7. What happens if I sell my home with an outstanding Home Equity Loan?

    If you sell your home with an outstanding Home Equity Loan, you’ll need to pay off the loan with the proceeds from the sale. The remaining funds, if any, will be available to you after the transaction is completed.

  8. Can I refinance a Home Equity Loan?

    Yes, you can refinance a Home Equity Loan, just like any other mortgage product. You might consider refinancing if you want to lower your interest rate, change the loan term, or consolidate multiple loans into one. However, it’s essential to contact one of our mortgage professionals to discuss what options are best for you.

  9. What factors should I consider when choosing a Home Equity Loan term?

    When selecting a term for your Home Equity Loan, consider your monthly budget, the loan’s interest rate, and how long you plan to stay in your home. A shorter term may result in higher monthly payments but will allow you to pay off the loan faster and save on interest. A longer term may provide lower monthly payments but will take longer to pay off and may result in higher overall interest costs.

  10. Is it possible to have more than one Home Equity Loan on a property?

    It is possible to have more than one Home Equity Loan on a property; however, the combined loan-to-value (CLTV) ratio must still fall within acceptable limits, typically 80% of the home’s value. It’s essential to carefully evaluate your financial situation and consult with a trusted financial advisor before taking on additional loans.

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