Merchants Bank offers two types of loans that use the equity in your home as collateral: a Home Equity Line of Credit (or HELOC) and a Second Mortgage (also known as a Home Equity Loan). Each works differently and which loan type is best for you will often be determined by your purpose for taking out the loan.
A Home Equity Line of Credit (HELOC)* is a revolving loan that works very much like a credit card. The equity you have in your home secures a credit line with a variable interest rate. The monthly payments are determined by how much money you owe the Bank, not by how big the line of credit is. As you pay down the amount you owe on your line of credit, the rest of the credit line is available for other uses.Benefits of a HELOC include:
- Low interest rate with an introductory APR as low as 2.9% for the first 6 months and 4.00% APR after 6 months.*
- Flexibility to borrow for anything -- a new car, college tuition, a vacation, home improvement project or any other need.
- Convenient access to funds when you choose.
- Potential tax advantages on the interest paid on a HELOC. Consult your tax advisor for more information.
- Local service from your local Merchants Bank branch.
A Second Mortgage , or Home Equity Loan, is simply borrowing money, using the equity in your home to secure the loan, much as a personal loan may use the value of a car to secure the loan.Options for your Second Mortgage:
- A Balloon Loan offers a variety of amortization schedules with flexible monthly payments to fit any budget.
- An Installment Loan has a fixed repayment schedule over a certain length of time.
- An Adjustable Rate Second Mortgage (ARM) offers an adjustable rate.
Second mortgages also offer potential tax advantages on interest paid. Consult your tax advisor for more information.
Frequently Asked Questions
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