Need cash to complete a home project, consolidate debt, or even fund an education? It’s at home!

The value in your home can help you achieve big goals. Tap into the equity in your home to fund a home improvement project, big event, or even consolidate debt! There are two common ways to borrow against your home equity—a home equity installment loan or a home equity line of credit.

What is home equity?

Home equity is the current market value of your home minus what you still owe. That difference is your equity, value you can borrow against when you need cash or access to funds. Because these funds are secured by the value in your home, interest rates are typically lower than those you’d pay with other types of borrowing like a personal loan or credit card.

If you’re using your equity to make home improvements, those changes could also increase your property value, making it a good investment long-term. 

What is a home equity installment loan?

A home equity installment loan is a one-time disbursement of funds secured by your home. When you borrow against the equity with a home equity loan, you’ll receive a lump sum of cash to use for anything. Then, you’ll make steady, predicable loan payments. Your rate won’t change during repayment. Repayments usually take place every month and terms may vary from one financial institution to another.

A home equity loan is a great solution when you need access to all your funds at one time or prefer a predictable monthly payment. Use your funds for a home improvement project, tuition, or an event. A home equity loan could also be an optimal solution to consolidate debt.

What is a home equity line of credit?

A HELOC (Home Equity Line of Credit) allows homeowners to borrow against the value in their home a little at a time up to a fixed amount (similar to a credit card). Pay interest only on the amount borrowed. Your line of credit will remain open for a set term, known as a draw period, before entering into a repayment period. Monthly payments will vary based on what you’ve borrowed and the current rate (Sandia Area’s HELOC features a variable rate).

A home equity line of credit is a great option for those who may not need funds all at once and prefer to pay only on what’s been drawn. A HELOC is also great for an emergency source of funds.

Ready To Start?

If you are ready to take the next steps in getting a Home Equity Loan or HELOC, the first step is to apply. Lenders consider factors including credit history and debt-to-income (DTI) ratio. Learn more about those factors here:

It is important to note that home equity installment loans or lines of credit place a lien on your home, which could result in the lender or financial institution taking ownership of your property in the event of a default. In some cases, defaults can lead to foreclosure.

Purchasing a home is a big investment but knowing how to make your home work for you is key to reaching financial goal and building a life you enjoy.

At Sandia Area, we offer great low rates and no closing costs¹, saving you thousands! Our application process is simple, with no application fees or annual fees. If you’re ready to get started:

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1. Closing costs associated with this product are waived for loan amounts up to $150,000 in the counties of  Bernalillo, Sandoval, Santa Fe, Valencia, Torrance, Cibola, Dona Ana, Rio Arriba, Mora, San Miguel and Los Alamos on primary residences with clean title history. Loans over $150,000 are subject to property appraisal, flood certification, recording fees and title insurance, which generally range from $1,467 to $1,600. Borrower is responsible for homeowners’ insurance and, if required, flood insurance. 3. Home Equity Line of Credit is a revolving credit line. Maximum loan amount is 90% LTV for 180 months up to $200,000. Loans over $200,000 will be reviewed on a case-by-case basis.