Home Equity Loans

You can use the cash from your home equity loan for any purpose you choose. Common uses include home renovations, debt consolidation, college expenses, or a dream vacation.

The cash will be available to you in a lump sum and then it's up to you whether you use it all for a single purpose, or for a few different things. Whatever you use your home equity loan for, you can enjoy the peace of mind that comes with regular monthly payments and a fixed interest rate.

The interest you pay on a home equity loan may be tax deductible if you use it to "buy, build, or substantially improve" your home. This means you'll need to itemize what you use your loan for and therefore itemize your deductions. The interest on funds you use for other purposes won't be tax deductible.

In addition, your total mortgage debt needs to be under $750,000, or $1 million, depending on whether you're filing your taxes singly or jointly with your spouse.

Yes, your home will need to be appraised because the amount of your home equity loan can be up to 80% of your home's current market value. So to figure out how much cash you can access, your lender needs to know how much your home is worth.

An appraisal also means that if you default on your loan, your lender will know how much money they can expect to recoup through sale of your home. Of course, if you shop around for a lender who offers easy monthly payments and a low fixed interest rate, your chances of default are very low!

With a Best Reward Home Equity Loan, you can access up to 80% of your home equity in any one instance. Remember, your home equity equals the current market value of your home, minus your current mortgage balance.

So if your house is worth $400,000 and you have a mortgage of $300,000, then you have home equity of $100,000. To find out how much you can borrow, 80% of that $100,000 means you could get $80,000 to use for any purpose you like.

Once you get the funds, you can choose whether you use all the money at the same time for a single purpose, or whether you use some now for a reason such as home renovations, and keep some aside for another reason such as college expenses. Just be sure to keep good records and itemize your use of the funds for tax purposes.

The funds from your home equity loan will be available to you soon after your loan is approved. You'll be able to access your funds through bank transfer into your checking account, by check, or by dropping into a branch for a cash withdrawal.

You can pay the loan back in the same simple way that you chose to access the funds. The easiest is through bank transfer but you can also pay through check or cash.