Question:

What is a 100% home equity loan?

Answer:

If you have a first mortgage on your home, a 100% home equity loan or line of credit (HELOC) will allow you to borrow up to the value of your home minus the first mortgage balance. The home equity loan comes as a second mortgage on your house.

When choosing your 100% home equity loan or line of credit, if you get a fixed rate you will avoid surprises in the monthly payment. Home equity loans are often used to consolidate debt - loans, credit cards and utility bills, and it is a convenience to make all your payments on a fixed date instead of having to remember multiple due dates.

In some states, it is possible to buy the rate down of a 100% home equity loan to reduce monthly payments. Also, often interest on home equity loans is completely tax-deductible.

When choosing a home equity loan, there are plenty of those that do not require application and origination fees. If you are asked to pay those, simply find another lender. However, the rate of your loan is most important, and sometimes agreeing to pay those fees may be worth it for a lower rate home equity loan.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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