The House Becomes a Home: Is a Home Equity Loan the Right Choice for Texas?

Posted by GO Federal Credit Union on November 30th, 2019

Many people seek out Texas to build up their assets. There is a largely different price point in Texas homes than other markets. People arrive as wide-eyed home buyers, looking for the perfect place to establish their lives. As they continue the process, the value of their home increases. They make renovations, and suddenly, the market value of their humble abode becomes much higher. Some may consider a home equity loan at their credit union.

A home equity loan secures itself based on the equity in your home, which means the value of your home after any repairs or renovations. It is often considered to be a second mortgage, after the one that helped you purchase this home in the first place. Equity loans allow you to borrow funds against the property’s value.

Home equity loans are:

• Offered at lower fixed rates than personal loans or credit card interest rates
• Not lines of credit
• Easier to qualify for
• Helpful for taking out large sums of money
• Useful for vacations, education, debt consolidation and more
  

Pros and cons:

However, there are things to consider. It is worth to note how much equity has accumulated in your home. Texas also has rules in place, such as Debt Total Limits, which means that you cannot have mortgage debt totaling more than 80% based upon your property’s fair market value. The state also does not allow owners to take out more than one home equity loan on the same property at a time. Finally, homeowners in Texas are only allowed to take out one loan per year.

The bottom line:

A home equity loan can be great for Texas homeowners, as laws have been put in place to protect borrowers. Big banks offer the same loans. However, they often come with higher interest rates. At GO Federal Credit Union, members can take advantage of lower, fixed rates and flexibility for using their funds. If you have a big vacation coming up or have been needing funds to update or repair your home, a home equity loan might be just what you need.

About Author

Based in Dallas TX, GO Federal Credit Union has committed itself to empowering its members through meeting their various financial needs. Like any other credit union, GOFCU is also a not-for-profit financial institution.

Federally insured by NCUA and Equal Housing Lender