FAQ's
A home equity loan lets you borrow a lump sum of money using the equity you’ve built in your home as collateral. You repay the loan in fixed monthly payments over a set term, often at a fixed interest rate. Many homeowners use these funds for remodeling projects, upgrades, or repairs that can improve the home’s value.
A home equity line of credit (HELOC) allows you to borrow against your home’s equity as needed. It is a revolving credit line. You can use the funds for home improvements, repay what you’ve borrowed, and draw on the line again.
It can be a good option if you have significant equity in your home, a clear plan for your renovation and can comfortably manage the monthly payments. Since the loan is secured by your home, interest rates are often lower than unsecured loans or credit cards. However, it’s important to consider your budget and long-term financial goals before borrowing.
You can access your equity through a home equity loan or a home equity line of credit (HELOC). Both options require you to apply through a lender, who will review your home’s value, your outstanding mortgage balance, and your creditworthiness to determine how much you can borrow.
Projects that often deliver strong returns include kitchen remodels, bathroom upgrades, adding energy-efficient windows, improving curb appeal with landscaping or updated siding and adding usable living space such as a finished basement or deck.
The amount depends on a number of factors, some of which include: your home’s value, the amount of equity you own and your ability to pay back what is borrowed. Typically, a home equity loan or line allow you to borrow up to a certain percentage of your home’s appraised value minus what you still owe on your mortgage.