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Home Equity Lines of Credit and Home Equity Loans Whether you need to make a major purchase, consolidate your debt or plan to embark on a home improvement project, a home equity line of credit or home equity loan might be the right choice for meeting your financing needs. Despite their name, home equity credit lines and loans can be used for almost any purpose. For certain uses, they may provide the added advantage of qualifying for federal income tax deductions. You should contact your tax advisor regarding the deductibility of interest and charges under the plan. Home Equity Line of Credit Secured by the equity in your home, a home equity line of credit typically carries a low interest rate and offers the financial flexibility of requiring monthly payments only on the interest on the loan. Or you can make principal payments with no penalty. Because it acts like a revolving line of credit, a home equity line of credit also provides the convenience of giving you access to your available funds anytime you want - for any reason. A key factor in determining whether to use a home equity line of credit is the interest rate environment. The credit line's rate will be tied to the prime interest rate, which means it will fluctuate as the prime rate moves up or down. Home Equity Loans Similar to a home equity line of credit, a home equity loan can be used for virtually any purpose and is secured by the equity in your home. The key difference in the loan .vs a line of credit is, that with the loan, the rate can be fixed for up to five years, and monthly payments cover both principal and interest. Need more information? Please contact a financial advisor at one of our convenient locations or send us a request through our Contact Us form.
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Pinnacle National Bank is regulated by the Office of the Comptroller of
the Currency (OCC). Visit the OCC website.
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