You can use a home equity loan when you want to borrow money against the equity in your home.
You can use the money for many needs:
- Home improvements and remodeling
- Purchase a new vehicle
- Debt consolidation
A home equity loan might be right for you because:
- You may be able to deduct your interest expense on your taxes.
- Closing costs are typically lower than refinancing your first mortgage.
- The interest rate is fixed for the life of the loan, allowing you to budget without worrying about increasing interest rates.
If you are looking to consolidate debt, make those needed home improvements, purchase a new vehicle, or pay for a child's secondary education, Dakota Community Bank & Trust, N.A. may have financing options for you by using the equity you already have in your home. Please contact us to help you find the best home equity loan option to fit your needs.
Frequently Asked Questions about Home Equity
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What is a home equity loan?
- A home equity loan is a loan that is secured by a residential property, typically your home. The collateral is taken from the difference between your current mortgage and the value of your home or equity. Loan proceeds are disbursed in one lump sum after loan closing. Repayment is in monthly installments for a term of one to thirty years.
What is a home equity line of credit?
- A home equity line of credit is a great option to use if your expenses are not all due at one time. The line of credit is similar to a credit card because it is revolving credit. This means you can use the funds, pay them off, and then use them again and again.
Why should I choose a home equity loan?
- Interest rates on a home equity loan are typically lower than credit cards or other types of credit. This means more money is kept in your pocket. Also any interest you do pay on a home equity loan may be tax deductible. Consult a tax adviser to confirm deductibility of interest.
What can I use my home equity loan on?
- A home equity loan may be used to finance anything you would like. Typically a home equity loan is used to pay for home improvements, consolidating higher interest debt, purchasing vehicles, education, or purchasing secondary properties.
What will my payment be?
- If you and your loan officer choose to do a home equity loan your payment will be a fixed monthly installment that is amortized over the term of your loan. If you choose to do a home equity line of credit your payment will be a minimum of 2% of any outstanding principal plus any accrued interest.
Are there any discounts for automatic payments?
- If you choose to do automatic payments on your home equity loan from a Dakota Community Bank & Trust, N.A. account at the time of your loan setup you will qualify for a discount from the standard interest rate.
Is the interest rate fixed or variable?
- The interest rate on your home equity loan will be fixed for the term of your loan. This gives you the peace of mind that your payments will not increase as the interest rates rise.
How long does it take to complete a home equity loan?
- You can complete the initial application process in as little as 10-15 minutes. It takes about 3-5 days for your loan officer to obtain all the information to complete and process your loan request. Once you sign the loan documents the funds will be available to you after a rescission period of 3 business days.