What is Home Equity?

You scrimped and saved for years with the goal of holding the key to your very own home. Now that you’ve been in your house for awhile, it’s time to start thinking about your next goal. Today, you could be…

What is Home Equity?

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You scrimped and saved for years with the goal of holding the key to your very own home. Now that you’ve been in your house for awhile, it’s time to start thinking about your next goal. Today, you could be holding the key to financing the rest of your dreams. Let us explain how a Century Bank home equity loan or line of credit, often referred to as a HELOC, can work for you.

Now you may be wondering, what is home equity?

Home equity is the difference between what your home could sell for, or the assessed value, minus what you owe on your mortgage. As you make mortgage payments, the equity in your home builds. At Century Bank, you can borrow up to 75% of the tax-assessed value of your home, minus your mortgage balance.

For example, if your home tax-assessed value is $400,000, 75% is $300,000. You then subtract what you owe on your mortgage, say $100,000. Then the maximum amount you’d be able to borrow is $200,000.

What can you do with that money? That is where your dreams come in.

Taking out a home equity loan or HELOC for home improvements may be one of the wisest investments you make. That is because you could be borrowing money to increase the market value of your home and create a better living environment for yourself. That sleek, modern kitchen can now be yours.

You can also use your home equity to offset unexpected expenses. Many people turn to credit cards in pinch, say for medical bills or unexpected car repairs. Credit card interest rates can be high-really high. Since home equity interest rates are often lower than those of credit cards, tapping into your home equity to consolidate or pay off debt at a higher interest rate could save you money in the long run.

Think a home equity loan or line of credit is for you? No matter what you dream for you and your family, Century Bank is your trusted partner. Let an experienced Borrowing Specialist assist you. Apply online or at any of our branches.

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