FAQs

Requirements vary by lender and product. Educational Systems FCU's HELOC pricing includes loan-to-value tiers up to 95%, subject to credit approval and restrictions.

Borrowing the maximum is not always wise. Keeping more equity can provide a cushion if home values decline or unexpected expenses appear. Ask how the lender calculates combined loan-to-value.

Most lenders in Maryland also use an 80% to 90% combined loan-to-value guideline for many home equity products, depending on credit strength. Your home may need a professional appraisal to confirm its current market value before approval. The amount of equity you have can also influence your interest rate, not just your eligibility.

Home equity proceeds can often support debt consolidation. Educational Systems FCU lists debt consolidation as one possible use for a second mortgage. A lower rate may reduce interest costs, but unsecured balances become debt secured by your home.

Avoid rebuilding credit card balances after consolidation. A written payoff and spending plan can help protect the benefit.

Interest may qualify in limited situations. The IRS states that interest on a loan secured by a main or second home may be deductible when proceeds are used to buy, build, or substantially improve the residence, subject to applicable limits.

Interest used for personal debt generally does not qualify under that rule. Consult a qualified tax professional before relying on a deduction.