Home equity loan

Both options let you borrow against the equity in your home, but they work in different ways. Both use your home as collateral, and both may offer lower interest rates compared to unsecured debt, such as a credit card.

With a Home Equity Loan (HELOAN), you receive a one-time lump sum and repay it over a set period with fixed monthly payments. It can be ideal for larger, planned expenses, and may make it easier to budget because your payments won’t change.

A Home Equity Line of Credit (HELOC) works like a credit card. You’re approved for a set limit and can borrow what you need, when you need it, during the draw period. Payments and interest may vary over time. It can be ideal for ongoing projects or flexible expenses.

Interest can be tax-deductible, depending on what the funds are used for. Generally, interest could be deductible for qualifying home improvements.^{Disclosure 4} If the loan is used for other expenses, such as credit card or medical debt, the interest typically isn’t tax-deductible. Your mortgage professional or tax preparer can help you determine whether interest on your loan is tax-deductible, based on your situation.

Closing costs for a Home Equity Loan depend on your lender. Some lenders may pay these costs on your behalf, while others may require you to pay them up front. With a Truist Home Equity Loan, we pay the closing costs on your behalf.

Truist Home Equity Loans are typically processed within 30 to 45 days.

A Truist Home Equity Loan is a second mortgage that sits behind an existing first lien on your home, such as a mortgage, HELOC, or another type of primary loan. It doesn’t replace your first lien. Instead, it lets you borrow against your home’s equity while keeping your existing loan in place. You receive the funds as a one‑time lump sum with a fixed interest rate.

Because a Home Equity Loan is a secured lien on your property, it must be paid in full before the title can be transferred. Proceeds from the sale of your home would typically be used to settle the debt, at which time the lien would be removed. If the sale price falls short of what you owe, you must cover the remaining balance with out-of-pocket funds.

When evaluating your loan application, we’ll look at factors including your credit score, credit history, your debt-to-income ratio, your income, existing liens on your home, and the available equity in your home. The terms of your loan, including its annual percentage rate (APR), may differ based on these factors. Loan terms may also be affected by how much you want to borrow and your repayment period (5 to 30 years). Higher credit scores generally result in more favorable terms.