Mortgage, Refinance, and Home Equity Loans Made Easy

Let’s Talk Home Loans

What is a “home loan”?

Commonly known as a mortgage, this is a type of loan provided by financial institutions to assist people with purchasing a home. The borrower obtains a specific amount of money from the lender to buy the property and agrees to repay the loan over a set period, typically 15 to 30 years, with interest.

Home finance loans generally require a down payment, which is a portion of the property’s purchase price that the buyer pays upfront. The lender then finances the remaining amount as the mortgage.

The terms and conditions will vary among lenders and depend on factors such as the borrower’s credit history, income, and the current real estate market conditions. Read more in our blog.

Is a refinance considered a home loan?

Yes, a refinance is a home loan. It involves replacing an existing mortgage with a new one, often with different terms. This can be done to take advantage of lower interest rates, to change the duration of the loan, or to switch from a fixed-rate to an adjustable-rate, or vice versa.

In essence, a home refinance is simply a new loan agreement that pays off the existing balance. The borrower then establishes a new lending agreement with the same or new lender. Get more info from our blog.

What about a home equity line of credit?

A home equity line of credit (HELOC) is a revolving line of credit secured by a borrower’s home. It allows homeowners to borrow against the equity in their property, typically up to a predetermined limit, using their home as collateral.

The amount borrowed can be accessed as needed and repaid over time, similar to a credit card. Interest is charged only on the amount actually borrowed, and the credit line can be used for various purposes such as home improvements, debt consolidation, or other expenses.

HELOCs often have variable interest rates and a draw period during which funds can be accessed, followed by a repayment period. The application process for a HELOC places specific emphasis on assessing the equity in the borrower’s home and their ability to manage a line of credit, as opposed to the more comprehensive assessment for a traditional mortgage.

Check out our blog for more information on home equity lines of credit.