Home equity loans can be a good option for homeowners because:

The interest paid on the loan amount – up to $100.000 - may be tax deductible, regardless of purpose.

As they are secured by collateral, homeowners will ordinarily qualify for larger loan amounts with home equity loans than would be available with different scenarios.

Home equity loans provide an up-front, lump sum payment to address a specific one-time need. For example, if you plan to remodel your bathroom or purchase a car you might consider a home equity loan to cover the costs.

Home equity loans can provide the security of fixed interest and payments so that you know what to expect.

Of course there are also drawbacks.

Home equity loans are secured by your home. If you are unable to repay, the lender can recoup lost funds through the sale of your home, i.e. foreclosure.

You may not have sufficient funds to complete the project if expenses exceed the budgeted/loaned amount.

Make sure that a home equity loan is right for you by talking with your credit union representative. In addition to an array of loan products, your credit union offers personalized service that combines financial expertise with knowledge about your particular situation and needs.

Working together you can navigate such issues as:

Repayment terms. How much will it cost to borrow over the life of the loan? Closing costs. What can you expect to pay and how much? Penalties. Is there a penalty for early repayment?

With an understanding of home equity loans and your financial needs and goals you can find the loan terms that work best.

Home equity loans require an application process much like the one you completed for your first mortgage. The language can be confusing. After, all you don’t do this every day.

Ask questions until you understand.
Take notes if it helps you.
Review your credit union’s website and available brochures. Call or stop in to talk with your credit union representative to get the information you need when you are beginning to consider your options.