If you own your home, at some point you may think about taking out a home equity loan. In Monroe, Louisiana, financial facilities such as Century Next Bank, offer this type of service. Before you decide to arrange for this type of loan, you should get an understanding about this type of loan.
What Are Home Equity Loans?
A home equity loan also goes by several other names. These include:
- Home Equity Line of Credit
- Home equity installment loan
- Equity credit line
No matter what lending institutions call it, it is a type of consumer loan. The amount you can borrow relies on the equity in your home. You receive this money based on the existing difference between what your home or other structure is worth in today’s market and the amount you have paid on your mortgage or, conversely, the amount of the mortgage still due. However, whether you obtain a loan is not solely based on this combined loan-to-value (CLTV). Other criteria focus on:
- Credit score: The higher the credit score, the better
- A debt-to-income ratio: This should be less than 43 percent
The financial institution will also request a detailed and authenticated indication of your ability to repay this loan.
Choosing Home Equity Loans
If you are considering what a home equity loan can do for you, talk to a professional first. They can clarify whether it is the right route to take. You may also discover another solution that avoids using your home as collateral.
Century Next Bank, a federally chartered stock savings bank, has been providing its services to Louisiana for decades. A local financial institution, it has always been committed to serving its customers and community. Century Next Bank is a Member FDIC and Equal Housing Lender.
