Your home base could be your launch pad. Use your house as collateral on a loan or line of credit.
Georgia homeowners have an excellent opportunity to unlock extra funds from the equity they’ve built in their home. A home equity loan or line of credit based on your equity can provide you with a large lump sum or revolving credit to use for any purpose. With interest rates still near historic lows, now is a great time for Georgia homeowners to consider tapping into their home’s equity.
What is Home Equity and How Does it Work?
The equity in your home is essentially its market value minus any mortgage debt still owed on it. As you pay down your mortgage over time, the equity builds. Home values in Georgia have also steadily increased in most areas, further growing equity amounts.
Tapping into your equity simply means leveraging the equity as collateral to borrow money You can do this via a closed-end home equity loan or an open-end home equity line of credit,
With a home equity loan you receive a lump sum of cash upfront and repay it over a fixed term with a fixed interest rate just like a standard mortgage loan. The term is usually 10 to 30 years.
A home equity line of credit (HELOC) works more like a credit card. You have access to a revolving credit line, allowing you to draw money as needed up to a set limit. HELOCs have variable interest rates and a draw period (usually 10 years) and repayment period (usually 20 years).
In both cases your home acts as collateral on the loan, meaning the lender can take possession of your home if you default.
Benefits of Tapping Home Equity in Georgia
There are many great reasons Georgia homeowners might want to open a home equity loan or line of credit:
- Consolidate high-interest debt at a lower rate to save money
- Pay for home improvements and renovations to increase your property value
- Fund large purchases like a wedding, college tuition, or medical bills
- Access cash for other financial needs since rates are low right now
The major benefits of home equity financing include:
- Higher loan amounts than you could get with other products
- Lower interest rates compared to things like credit cards or personal loans
- Interest may be tax deductible (consult a tax pro to be sure)
- Use the funds for any purpose since these are not purpose-specific loans
Home equity loans and HELOCs involve borrowing against your own equity rather than taking on completely new debt. This can help you access funds more easily and affordably.
Home Equity Loan Options from Georgia Credit Unions
Local credit unions offer some of the most competitive home equity loan options for Georgia borrowers. Here are two great choices:
Georgia’s Own Credit Union offers home equity loans and HELOCs with loan amounts from $10,000 to $500,000 and terms up to 30 years.
- Fixed rates as low as 2.99% APR
- HELOC rates as low as 10.25% APR
- Online applications, rate quotes, and account access
Georgia United Credit Union provides a Combo HELOC product combining features of both home equity loans and lines of credit.
- Credit lines from $10,000 to $500,000
- Fixed rate loan options up to 10 years
- HELOC rates as low as 8% APR
- Easy online and mobile banking
Credit unions like these offer homeowners equity financing options that are affordable, flexible, and convenient. Their online tools make it easy to apply and manage an equity loan or HELOC.
What Are the Requirements for Home Equity Loans in Georgia?
While requirements vary by lender, here are some typical eligibility standards for home equity loans and HELOCs in Georgia:
- Excellent credit (640+ FICO score)
- Sufficient equity in your home
- Loan-to-Value ratio of 90% or lower
- Stable income and employment
- Low debt-to-income ratio (below 50%)
- Homeowner’s insurance on your property
The loan amount and terms will depend on factors like your equity, credit score, and debt-to-income ratio. Work on improving these areas to qualify for better offers.
How Much Does a Home Equity Loan Cost in Georgia?
Closing costs are the main expenses associated with getting a home equity loan or HELOC in Georgia. These can add up to around 2-5% of your loan amount.
Closing costs include:
- Origination or application fees – Around $500 to $1,000
- Appraisal fee – $300 to $600 to assess your home value
- Third-party fees – Title searches, document prep, recording fees, etc.
- Taxes and insurance – Lender may require 1 year’s advance payment
Good credit can help you qualify for lender credits to offset some closing costs. A HELOC will have lower closing costs than a fixed home equity loan.
Shop around among multiple lenders and compare total costs. Ask lenders if they offer any cost offset programs.
How Much Equity Can I Tap with a Home Equity Loan?
Lenders typically let you borrow up to 80-90% of your total equity. So if your home is worth $300,000 and you owe $150,000 on your mortgage, your equity is $150,000. You could qualify to borrow around $120,000 to $135,000 against that equity.
Aim to keep your total loan-to-value ratio below 90% so you can get the best rates. Leaving at least 10-20% equity protects lenders.
Consider starting with a smaller loan or line amount rather than maxing out your equity all at once. This gives you flexibility in case you need funds for other needs down the road.
Should I Get a Fixed or Variable Home Equity Loan?
This decision depends on your financial situation and needs:
- Fixed-rate – Best if you want predictable payments. Provides stability.
- Variable/HELOC – Better if you want flexibility. Lower rates and costs.
Run the numbers for both options to see which provides the most savings over your repayment period. Get quotes from multiple Georgia lenders before deciding.
Talk through your situation with a loan officer. They can explain the pros and cons and help you choose the right home equity product.
5 Tips for Getting the Best Home Equity Loan in Georgia
Follow these tips when shopping for a home equity loan or HELOC:
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Check your credit and improve your score if needed to qualify for better rates.
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Shop with multiple lenders, including banks, credit unions, and online lenders. Compare all costs and terms.
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Consider both fixed and variable rate products to see which option provides more savings.
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Ask lenders if they offer any cost offsets or discounts that could lower your closing costs.
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Limit your loan-to-value ratio to 80-90% to get approved for more favorable loan terms.
Home Equity Loans Allow Georgia Homeowners to Unlock Funds
With minimal eligibility requirements and super low interest rates, now is the perfect time for Georgia homeowners to tap into their home equity.
Credit unions like Georgia’s Own and Georgia United offer home equity loans and HELOCs with online convenience, flexible terms, and competitive rates. Their lending experts can help you decide if borrowing against your equity is the right financial move.
Use these new funds from the equity you’ve built to knock out high-rate debt, cover large expenses, or access cash for other needs. Carefully weigh the costs versus benefits and structure your repayment sensibly.
When used strategically, a home equity loan or HELOC can provide Georgia homeowners with a valuable financial resource right at their fingertips. Your home equity can offer you financial flexibility when you need it most.
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Home Equity Loan and HELOC FAQs
Option A: Payment is equal to 1.5% of the outstanding balance or $75, whichever is greater. Maximum CLTV of 95% with mortgage insurance.
Option B: Payment on accrued interest only of the outstanding balance during the preceding month or $75, whichever is greater. Maximum CLTV of 75% to qualify.
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It typically takes 30-45 days to close on a new loan once we receive your application and documentation. If an appraisal or additional documentation is needed, processing times could be longer.
Because each loan and member are different, the information needed varies. Here’s a general list of documentation you may need:
- Most recent pay stubs
- Most recent W-2 (one or two years)
- Mortgage statements for all properties owned
- Adjustable-rate mortgage note
- Copy of homeowner’s insurance statement
- Copy of HOA statement or verbally stated
- Copy of Georgia driver’s license
- Self-employed applicants: Your two, most recent tax returns with all schedules (A through E and K-1 with supporting documents; e.g., Forms 1065, 1120-S, or 1120, etc.), along with a certified Profit & Loss YTD statement.
- Other items may be required during application processing
If you have a specific amount you need to borrow and prefer predictability, a fixed-rate home equity loan may be the best option. With a fixed-rate loan, you receive the money you’re borrowing in a single payment, and the interest rate stays the same for the life of the loan. (There must be a first mortgage lien already in place. Georgia’s Own cannot be in first position on a fixed-rate equity loan.)
If you’re unsure of how much you need and want to take advantage of the lowest rates in the market, you may want to consider a home equity line of credit (HELOC). With a HELOC, you have the ability to advance whenever you need to, up to your maximum credit limit, during the 10-year draw period. Because it has a variable interest rate, your HELOC rate could change monthly, depending on the index, which is the Wall Street Journal Prime Rate.
If you need help deciding which loan option is best for you, our home equity specialists can provide a personalized recommendation based on your financial situation.
HELOC Vs Home Equity Loan: Which is Better?
FAQ
How do home equity loans work in Georgia?
What is the monthly payment on a $50,000 home equity loan?
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Loan amount
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Monthly payment
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$25,000
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$166.16
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$50,000
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$332.32
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$100,000
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$673.72
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$150,000
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$996.95
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What is the downside of a home equity loan?
What disqualifies you from getting a home equity loan?
What is a home equity loan?
It’s a combination of a home equity loan and home equity line of credit, with the option to secure a fixed rate with a fixed monthly payment or a variable rate line of credit. Unlock the power of your home’s equity today and say hello to endless possibilities.
How does a home equity loan work in Georgia?
A home equity loan is paid out in one lump sum and repaid in fixed monthly installments over a set period of months. With the rising home values in Georgia and your mortgage principal reducing, your equity is growing. Let us identify your home equity options. Talk to an Expert
Where can I get a home equity loan or line of credit?
Various lending institutions, including some banks and credit unions, offer home equity loans and lines of credit. Each provider will have different terms and conditions for their programs. If you are considering a home equity loan or line of credit, you should research different institutions to find the best offer for you.
How do home equity loan rates work?
Most home equity loan rates are indexed to an industry base rate called the prime rate. This represents the lowest credit rate lenders are able to offer their most attractive borrowers, though most lenders will add a margin to calculate their final rate offer.
What is a HELOC & a home equity loan?
A HELOC is a revolving credit line that you use as needed — you only pay back what you borrow plus interest. A home equity loan is paid in one lump sum to the borrower. Payments are a fixed amount for a set number of months. Talk to an Expert A HELOC is a credit line that you use as needed.
What is a home equity line of credit?
A home equity line of credit is a form of revolving credit in which your home serves as collateral.