What is Home Equity?

If you are a homeowner, you work hard to pay for your home. So, when you need to borrow some extra money, you may put the equity in your home to work for you.

What does Home Equity mean?

Simply put, home equity is the portion of your property that you truly own. It is the difference between your house’s market value and the amount outstanding on your mortgage loan. So, if market value is $350,000 and your mortgage balance is $250,000, your equity would be $100,000. As you continue to pay down your mortgage and market value (hopefully) increases, you build more equity.

How can you use Home Equity?

Once you have gained equity in your home, there are a few different options for home equity loan products.

• Home Equity Loan: A Home Equity Loan lets you borrow a fixed amount, secured by the equity in your home, at a fixed rate and you receive the money in one lump sum.
• HELOC: A Home Equity Line of Credit (HELOC) lets you withdraw money as you need it, up to a predetermined limit, and repay the loan over a fixed term. Trailhead’s HELOC, called the Equity Options Line of Credit, offers the convenience and flexibility of a large credit line and allows you to re-use the funds as you pay the balance. You have the option: draw on your variable rate line of credit whenever you need, or lock in part (or all) of the outstanding balance at a fixed rate and term.

What are the benefits of a Home Equity product?

A Home Equity Loan or HELOC can be used to finance whatever you need the money for, including home improvements, education, or debt consolidation. Plus, they often have a lower interest rate than you might pay on other types of loans.

For more information on how your home’s equity can work for you, speak with one of our Member Service Officers at 503.220.2592.