For homeowners
Home Equity Loans in Michigan
A home equity loan is a second mortgage paid out once, at a fixed rate, that leaves your first mortgage and its rate in place. It fits a cost you can name today, so size it to the quote rather than to all the equity you have.
- No credit pull to talk
- Licensed mortgage broker, NMLS 2041154
Home Equity Loan
Key benefits
Keep Your First Mortgage
Your current rate and term stay in place.
A Payment That Does Not Move
The rate and payment are set at closing. You give up a line of credit’s draw-as-you-go flexibility in exchange.
If You Sell or Refinance
The sale pays this loan off along with the first mortgage. A refinance of the first mortgage either pays it off or needs this lender’s agreement to stay in second place.
Home equity loan against a line of credit
Both borrow against equity and leave your first mortgage alone. The difference is whether you want all of the money now at a payment that never changes, or access to it over time.
| Difference | Home equity loan | HELOC |
|---|---|---|
| How the money arrives | One lump sum at closing. | A credit line you draw from as needed, over a set draw period. |
| Does the payment move | No. Fixed rate, fixed payment, fixed end date. | Usually variable, so the payment moves with the market. |
| What you pay interest on | The full amount from day one. | Only what you have actually drawn. |
| How repayment is shaped | Level payments of principal and interest from the start. | Often interest only during the draw, then a much larger payment when repayment begins. |
| Best suited to | A known, one-time cost. A roof, a renovation quote, consolidating a fixed balance. | Costs that arrive in stages, or a reserve you may never use. |
| The thing people regret | Borrowing more than the project needed because it was one decision. | Reaching the end of the draw period unprepared for the payment change. |
See how much equity I can use
Guidelines
Guidelines for this loan
What home equity lenders usually check. The amount depends on the value, what you owe and the lender’s limit.
Official sources
Check the rules at the source
Program guidelines change. These are the official pages we check them against.
Questions about this loan
If yours is not here, ask it on the call. There are no dumb questions.
Does this change my existing mortgage?
No. This is a second loan. Your original loan remains intact.
Is the interest tax deductible?
Possibly. Interest is deductible only when the money buys, builds or substantially improves the home that secures the loan, you itemize, and your total mortgage debt is within IRS limits (Publication 936). Check with your tax advisor.
What can I spend the money on?
The lender rarely restricts it. The better question is why, because the loan is paid out once and you pay interest on all of it from the first payment. Start with the reason.
Should I take a home equity loan or a HELOC?
If you want a fixed rate and a lump sum for a known cost, a home equity loan fits. A HELOC charges interest only on what you draw, which suits costs that arrive in stages, and its rate usually moves with the market. Watch the reset: many lines let you pay interest only during a draw period of several years, and then the balance is repaid over the years that remain, so the payment on the same balance can rise sharply when repayment starts. A home equity loan pays down principal from its first payment, so there is no reset.
Will it hurt my credit score?
It can dip briefly from the credit inquiry and the new account. On-time payments help over time.
Does a home equity loan raise my Michigan property taxes?
Not by itself. Michigan’s law lists a transfer for security as not being a transfer of ownership, and a home equity loan is a mortgage on the home you already own, so your taxable value keeps its cap. Changing who is on the deed is a different question, so ask before you add or remove anyone.
How much can I borrow?
Lenders cap the first mortgage and the new loan together at a share of the home’s value, often 80% to 90%, set by each lender. On a $400,000 home with a $220,000 first mortgage, an 80% cap allows up to $100,000 before costs: $320,000 minus $220,000. An appraisal sets the value.
What our clients say
Did my refi with Samantha. What a smooth process. … [A]ll steps explained in a way I completely understood. Such a pleasure to work with!
Can’t say enough great things about Samantha and her team at Align Lending! Highly recommend
Individual experiences. Results vary.
Ask Samantha whether this loan fits
Bring what the money is for and a quote if there is one. Samantha will size the loan to the need and compare it with a HELOC and a cash-out refinance.
- 1
Tell us what you are trying to do
Not what product you want. What you are actually trying to accomplish.
- 2
We look at your situation
Samantha works out what matters most for you specifically.
- 3
You leave with a plan
Your options, the tradeoffs, and your next step. No obligation to go further.
Start with your question
Start with a home equity strategy reviewAlign Lending LLC, NMLS #2041154, is a mortgage broker. Samantha Shelton, NMLS 1647301. Equal Housing Opportunity. Licensed in Michigan, Ohio, North Carolina, Florida, Louisiana and Texas. Program guidelines on this page are general and change over time; they are not a credit decision, a preapproval, a commitment to lend, or an offer of credit. Approval depends on your full application, the property and the lender's current guidelines.
