Home Equity Loans
When the time comes to fix your home, expand it, or make a large purchase, generations of homeowners in Central and Northern PA have turned to JVB for help with financing solutions. Why are we the local mortgage company of choice for so many residents of Centre County, Huntingdon County, Juniata County, McKean County, Mifflin County, Perry County, and Potter County? Our local mortgage loan officers offer personalized service and professional expertise. Unlike bigger banks and online lenders, our employees have firsthand knowledge of local real estate markets and have access to a wide array of loan types. At JVB, we make the home equity loan process as easy as it can be. With a fixed interest rate and monthly payment, a home equity installment loan from JVB is a simple and budget-friendly way to make home improvements or pay for big expenses.
What is a home equity loan and how does it work?
Home equity is the current market value of your home which exceeds the total of all your current mortgage balances. To figure out how much home equity you have, subtract any mortgage loan balances from the current market value of your house. Overall, home equity tends to grow with time as you pay down your mortgage and property values increase. However, the fair market value of a house can fluctuate with local demand, meaning that equity isn’t a fixed number. Home equity loans are based on the amount of equity you possess when you apply for and open the loan.
How does a home equity loan work? The best comparison is a fixed-rate mortgage. Many people think of their home equity loans as a second mortgage, but instead of using the loan to pay a seller for a house, you receive a lump sum to use for a designated purpose. As with fixed-rate mortgages, your home equity loan will have the same interest rate and monthly payment amount over the life of the loan.
How much can you borrow with a home equity loan? Every application is different, but it’s usually best to leave a certain margin between the amount of the loan and your total equity. This protects you from ending up "underwater" on your home loans in the event that property values decline. JVB's home equity lending team can help you determine the best amount to apply for based on your current loan-to-value ratio and the rest of your financial situation.
Benefits of home equity loans vs. HELOCs and personal loans
When homeowners need to finance a large expense, there are several options. Here are the primary benefits of a home equity loan as compared to a home equity line of credit (HELOC) or personal installment loan.
Low Fixed Interest Rates
Home equity and personal loans both have fixed rates, meaning you open the loan with an interest rate that won't change over time. This results in stable monthly payments that are easy to budget with. However, home equity loans usually come with lower interest rates because they are a "secured" type of debt, meaning your home serves as collateral. Because personal loans are "unsecured" (not tied to any assets), the interest rate is higher. Therefore, it makes more sense for homeowners with equity to apply for a home equity loan than a personal loan. Additionally, the interest you pay on a home equity loan may be tax deductible, which is not the case for personal loans.
HELOCs also have lower interest rates because any money you borrow is secured by an asset. However, the rate is not fixed; instead it can go up or down depending on national benchmarks. HELOCs are great when you want access to credit "just in case" but don't necessarily need to borrow a large sum. If you have a big expense in mind, it may make more sense to lock in a fixed interest rate with a home equity loan.
Predictable Monthly Payments
As mentioned above, the fixed rates on home equity and personal loans result in fixed monthly payments. This predictability is budget friendly--you don't have to worry about your monthly payment increasing due to fluctuating rates. With a HELOC, you only withdraw from the credit line when you want or need to, and interest rates can adjust over time. This results in fluctuating monthly payments that can be harder to accommodate in a tight budget.
Greater Borrowing Potential
Personal loans tend to be smaller, ranging from $1,000 to $10,000 depending on the borrower's credit score and finances. With home equity loans and HELOCs, you can potentially borrow much more depending on the amount of equity you possess. Therefore, a secondary home loan is more useful for financing large expenses such as a kitchen renovation.
Why Choose JVB for your home equity loan?
JVB has been writing home equity loans for as long as they have been available. Consulting with JVB's friendly, knowledgeable team will reduce the stress of the loan process. When you're looking for a home equity loan lender or other type of home loan in Central or Northern PA, look no further than JVB. Whether in person or online, the mortgage team at JVB is ready to answer your questions about home equity loans and the application process.
- Call the JVB Customer Care Center to be connected to one of our experienced home loan lenders. 1-855-582-5101
- Let us call you. Use our Schedule a Call form and someone will contact you on a date and at a time of your choosing.
- Email our team to determine if a home equity loan is right for your needs.
- Chat with us right now using the Live Chat link showing at the top of the page.
- Visit your local JVB community office in Blairs Mills, McAlisterville, Mifflintown, Port Royal, Richfield, Port Allegany, Lillibridge, Burnham, Reedsville, Lewistown, Millerstown, Coudersport, or Liverpool or our loan office in State College.