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Home Equity Loan (HELOAN)
Fixed-Rate Equity Solutions
Updated: February 2026
Reviewed: February 2026 by Sebastian Naranjo, NMLS #2313958
A Home Equity Loan (HELOAN) is a second mortgage that lets you borrow against your home's equity. Unlike a HELOC, which provides a revolving credit line, a HELOAN gives you a lump sum upfront with a fixed interest rate and predictable monthly payments.
At SRK CAPITAL, At SRK CAPITAL, we offer a range of HELOAN options with competitive rates. Our experts will help you determine how much equity you can access and structure a loan that fits your financial goals while maintaining manageable monthly payments.
Ready to Tap Into Your Equity?
Let us help you unlock your home's value with a fixed-rate Home Equity Loan.
What Is a Home Equity Loan (HELOAN)?
Understanding Home Equity Loans
A Home Equity Loan is a type of loan that lets you borrow against the equity in your home. Equity is the difference between your home's current market value and the amount you owe on your mortgage. With a HELOAN, you get a lump sum upfront and repay it over a fixed term with set monthly payments. This structure provides predictability and stability in your financial planning.
Key Characteristics
- •Fixed interest rate for predictable payments
- •Lump sum disbursement at closing
- •Second lien position on your property
- •Terms typically range from 5-30 years
Important Note: A HELOAN is secured by your home. While it provides access to significant funds at competitive rates, it's crucial to ensure you can comfortably manage the additional monthly payment alongside your primary mortgage.
Key Features of a HELOAN
Fixed Interest Rate
Unlike other equity based loans, HELOANs usually come with a fixed interest rate. This means your monthly payments stay consistent throughout the loan term.
Lump Sum Disbursement
You get the entire loan amount upfront, making it ideal for large, one-time expenses.
Fixed Repayment Term
Repayment periods can range from a couple of years to 30 years. It depends on the lender and what aligns with your financial goals.
Tax Deductions
The interest paid on a HELOAN can be tax-deductible, especially if the funds are used for home improvements. Consult with a licensed tax advisor for specifics.
How Does a HELOAN Work?
When you take out a HELOAN, you're using your home as collateral. This means the lender has a claim against your property if you fail to repay the loan. The amount you can borrow typically depends on your home's value, the amount of equity you have, and your creditworthiness. Lenders often allow you to borrow up to 80% to 90% of your home's equity.
Collateral
Your home secures the loan, enabling better rates
LTV Ratio
Borrow up to 80-90% of your home's equity
Benefits of Choosing a HELOAN
Predictable Payments
Fixed rates and terms make budgeting easier.
Lower Interest Rates
HELOANs often have lower rates compared to unsecured loans or credit cards.
Access to Large Funds
Borrow a large amount. The total you can borrow is based on your home's equity.
Key Advantage: HELOANs offer the stability and predictability you need for major financial decisions, with fixed rates that protect you from market fluctuations.
Common Uses for a HELOAN
Home Improvements
Enhance your property's value and enjoy upgraded living spaces.
Debt Consolidation
Combine high-interest debts into a single, lower-interest payment.
Education Expenses
Fund tuition or other educational costs, including college tuition.
Major Purchases
Cover significant expenses like medical bills, college tuition, or even buying a house.
Eligibility Requirements
- Credit Score: A good to excellent credit score improves your chances of approval and favorable terms.
- Home Equity: Having enough equity in your home is essential. equity in your home
- Debt-to-Income Ratio (DTI): Lenders assess your ability to manage extra debt.
- Income Stability: Proof of steady income assures lenders of your repayment ability.
The Application Process
Step 1
Assess Your Equity
Find out your home's current value and subtract your mortgage balance to calculate available equity.
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Step 2
Check Your Credit
Review your credit report and score. Take care of any discrepancies or issues beforehand.
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Step 3
Gather Documentation
Prepare necessary documents, including proof of income, tax returns, and information about your existing mortgage.
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Step 4
Apply with SRK CAPITAL
Finish your application. Our team will guide you through each step, ensuring a smooth process.
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Step 5
Appraisal
An appraisal will be ordered to confirm your home's value.
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Step 6
Approval and Closing
Once approved, you'll review and sign the loan agreement, and funds will be disbursed.
Important Considerations Before Applying
Risk of Foreclosure
Since your home is collateral, failure to repay can lead to foreclosure.
Closing Costs
Be aware of potential fees, like origination fees, appraisal fees, and closing costs.
Impact on Home Equity
Borrowing reduces the equity you have in your home, which can affect future financial decisions.
⚠️ Important: Since your home is collateral, carefully consider your ability to repay before proceeding
Commonly Asked Questions
Financial Disclosure
The information provided on this page is for educational purposes only and does not constitute financial, legal, or tax advice. Mortgage rates and terms are subject to change and may vary based on your individual financial situation. Please consult with a licensed mortgage professional at SRK CAPITAL for personalized guidance.