Home Equity Mortgage

A second mortgage, commonly referred to as a home equity loan, allows you to use the “equity” in your home to secure a second home loan. Equity refers to the difference between what your home is worth and what you still owe on your first mortgage. Home Equity loans are also known as Closed-end Seconds.

FLCBank offers a Closed-end Second mortgage product that allows you to obtain a Home Equity loan. The homeowner takes out two loans simultaneously: the first loan is for 80 percent of a home’s value and the second loan is based on the equity of their home.

With a Home Equity loan you typically receives all of the money in a lump sum, the payoff period normally lasts five to 10 years, and the interest rate is usually fixed.

A second mortgage could be right for you if:

  • You would prefer to get all of your borrowed money at once.
  • You want to stick with a fixed interest rate and fixed monthly payments.
  • You would like a short repayment period, typically five to 10 years.
  • You have a good idea of how much money you need to borrow.

When considering a Home Equity loan, keep these factors in mind:

  • You will have to make two loan payments each month — one for your mortgage and one for the second loan.
  • You will close on both loans at the same time so you most likely have to pay closing costs, which will require additional upfront cash.
  • Typically, the interest rates are higher on Home Equity loans.
  • Please consult your tax advisor regarding interest deductibility as tax rules may have changed.
  • You should also consider the risk that if you default on your payments, the lender could foreclose on your home. Borrowing against home equity isn’t right for everyone and every situation, make sure you understand both the benefits and potential risks.

At this time FLCBank doesn't offer Home Equity Line of Credit loans (HELOCs).