Home Equity Loans & Lines of Credit
Looking for a way to pay for your next home improvement project? Get the money you need with a low-rate loan that's secured by the value of your home — also known as a Home Equity Loan.
What is a Home Equity Loan?
A home equity loan is a way for you to cash out part of your home's value to pay for something else.
Home equity example
If you owe less money on your home than its current market value, you have what's called equity. You can cash out part of that equity in the form of a lump sum loan. For example, if your home is worth $200,000 and you only have $125,000 left to pay on your mortgage, that means you have $75,000 of equity — and the Bank might be able to lend you a percentage of that amount at a low rate, secured by your home.
Keep in mind that Home Equity Loans should not be used for everyday things like living expenses, or items that will lose their value over time. They're better used for things that will improve the value of your home (like a renovation), or to consolidate high-interest debt (like credit cards).
What is a Home Equity Line of Credit (HELOC)?
Instead of borrowing a one-time lump sum, you could also borrow against the value of your home in the form of a credit line. This is called a Home Equity Line of Credit, or HELOC. Unlike a regular loan, a HELOC is something you establish ahead of time, and only use when — and if — you need it. You'll only make a payment on the balance you have advanced on the line, and you can re-use the funds after you pay them back. In that sense, it's sort of like a credit card — only with your home as the collateral.
Why use a Home Equity Loan?
Borrowing against your home equity can be a cost effective source of credit, because the interest rate is usually lower than credit cards. Terms are often flexible. Plus, unlike credit card debt, the interest rate on a Home Equity Loan or Line of Credit is generally tax-deductible (though you should always consult your tax advisor to confirm this).
How much can you borrow?
You can typically borrow up to between 75-85 percent of the value of your home, minus the amount that you owe on your mortgage. Your lender may also consider things like your credit score, employment history and monthly income when deciding the official terms and conditions of your loan.
Why Security National Bank?
- Local decisions. Since we're a locally owned Bank, our team makes all lending decisions right here in Sioux City and Siouxland.
- Support, when you need it. Once completed, your Home Equity Loan stays local, right here with us. We won't sell it to another financial institution — which means we'll be there for you, every step of the way.
- Competitive rates. Security National Bank currently offers Home Equity Loans for as low as 7.10% APR* and Home Equity Lines of Credit for as low as 7.60% APR*.
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*APR means “adjusted percentage rate.” This is not a commitment to lend. Subject to credit underwriting and approval. Terms and conditions apply. Programs, rates, terms and conditions are effective as of , unless otherwise noted, and subject to change without notice. Eligibility for preferred rates is determined by many factors including credit rating, how often you have sought credit, how much and what other types of credit you have available, and how it has been used. We will also consider income level and banking relationships. No single factor will dictate the rate, but rather all the factors together will determine whether you will qualify for the preferred rate. Security National Bank of South Dakota is not a tax advisor. For more information regarding your unique tax circumstances, contact your personal tax advisor.