Home Equity Loans and Home Equity Line of Credit (HELOC)

We also have home equity lines of credit and home equity loans available. If you are in the market for credit, a home equity plan is one of several options that might be right for you.

Home Equity Loan

Home equity and HELOCs

Not to be confused for each other, a home equity loan is borrowing a set dollar amount alongside a term. Home equity loans can have a fixed rate for up to 10 years. The payments would remain the same throughout the life of the loan. With longer term loans, such as 15 or 20 years, the interest rate then becomes variable.

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
  • Vacations
  • Emergencies
  • 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.

HELOCs

Whereas a home equity line of credit (HELOC) can be used when you want to borrow money against the equity in your home, in which your home serves as collateral; for things such as:

  • Home improvements and remodeling
  • Education
  • Purchasing a new vehicle
  • Vacations
  • Emergencies
  • Medical bills
  • Debt consolidation

A HELOC is a revolving line of credit whose set up is based on the equity in the home; approving you for a specific amount of credit allowing you a maximum amount you can borrow against as you need it. A HELOC has a fixed interest rate and the term is five years. Payments are based upon the interest accrued during the month plus two percent of the principal balance.

A home equity loan might be right for you for several reasons. These reasons include: the ability to possibly deduct your interest expense on your taxes; and closing costs typically being lower than refinancing your first mortgage allowing you to budget without worrying about increasing interest rates. Before making a decision, however, speak with our lending staff to make sure you are shopping for the right credit terms that best meet your borrowing needs without posing undue financial risk.

Dakota Community Bank & Trust may have financing options for you by using the equity you already have in your home, if you are looking to:

  • Consolidate debt
  • Make those needed home improvements
  • Purchase a new vehicle
  • Pay for a child’s secondary education

Please contact us to help you find the best home equity loan option to fit your needs.