INB recently received a call from a customer who was frustrated with another bank. The family was excited to install a pool before the warm season ended, but the other bank kept delaying funds for the project.

“We quickly stepped in and got an installment loan approved and funded within just a few days, allowing them to keep their place in line with the pool company and move forward with the project,” shares Madchen Johnson, Consumer Lending Manager at INB.

At the same time, INB’s consumer lending team helped the family set up a type of second mortgage called a home equity line of credit (or HELOC).

“We successfully closed and funded the HELOC in time for them to use it to pay off the installment loan with their first – and only – payment,” Madchen says.

What is a Second Mortgage?

A second mortgage is a loan secured by the equity you’ve built up in your home. It’s called a second mortgage because it follows your first mortgage. 

There are two types of second mortgages:

• home equity lines of credits (HELOCs)
• home equity loans

Both loans are ideal for major expenses in different scenarios, such as educational costs, paying off high-interest credit cards, vacations or home improvements – as with our customers who wanted to put in a pool. Their HELOC gave them a more flexible financing option for not only their new pool but also future needs.

Let’s break down the difference between a HELOC and home equity loan…

HELOCs

A home equity line of credit, or HELOC, is a revolving line of credit secured by your home.

HELOCs allow you to have access to cash to make purchases up to the value of the loan:

• You’re approved for a maximum credit limit
• You can withdraw the money as you need it over a fixed amount of time
• Repayments schedules are flexible, with a minimum monthly payment (like a credit card)
• You only pay interest on what you actually borrow

HELOCs are a great option when you want ongoing access to funds or are tackling projects with changing or unknown costs.

Home equity loans

With a home equity loan, you borrow a fixed, lump sum against your home’s equity and use your home as collateral:

• You receive all of the money upfront
• Monthly payments and interest rates are usually fixed; you’ll pay back the amount you borrowed, plus interest, on a schedule.

Home equity loans are ideal when you know exactly how much money you want to borrow.

Put Your Equity to Work for You

With INB, the process of using your home’s equity is simple and efficient, thanks to fast turnaround times and clear communication.

“Using a HELOC for our customers’ pool was such a positive experience that they decided to move all their checking and savings accounts to us,” Madchen shares.

“Not only did they establish a new banking relationship with INB after their disappointing experience with their previous bank, they’re also quick to refer people to INB as well.”

Whatever your goals, we’re here to help at INB. If you want to put your equity to work for you with a HELOC or home equity loan, come see us today. Or click the easy online application to get started!