Home Equity Loan
Financial flexibility at a fixed rate
Tap into the value you’ve built in your home with First Federal Bank of Kansas City's fixed-rate home equity loan. With a home equity loan, you receive a lump sum of cash upfront, making it perfect for home improvements, debt consolidation, or other big expenses. Our fixed-rate home equity loan provides stability and peace of mind so you can plan for the future with confidence.
Benefits of a home equity loan
- Your funds are granted as a lump sum as soon as you take out the loan.
- Make payments over a term of your preference – 7, 10, or 15 years*
- Home equity loans are fixed-rate, making budgeting easy with predictable monthly payments.
- Earn a 0.25% rate discount when you make automatic payments from a First Federal checking account.
- Loans start at $10,000
Rates
As low as
8.859% APR*
Learn more about Home Equity Loans
If you’re unfamiliar with Home Equity Loans, check out some helpful links below. Otherwise, feel free to reach out to our consumer lending team with any questions!
What is a home equity loan?
A home equity loan lets you borrow against the equity you’ve built in your home through a lump sum of cash upfront. Simply, they are a way to turn the value you've built up in your home into cash that you can use for whatever you need. A home equity loan has a fixed interest rate, meaning your monthly payment on this loan will be the same for the entire term length. Additionally, the interest you pay may be tax deductible.
How does a home equity loan work?
With a home equity loan, you get a lump sum of cash as soon as you take out the loan. The amount of cash you can take out depends on the amount of equity you have in your home (read below to see how this amount is calculated). To pay back the loan, you choose the term of the loan (7, 10 or 15 years*). A home equity loan has a fixed-rate, which means you will pay consistent monthly payments throughout the loan period. The rate for your loan is based on your CLTV (combined loan-to-value) rate and loan term.
How much money can I take out with a home equity loan?
A home equity loan uses the value of your home to determine the amount of cash you can take out. Generally, you may be able to take out a home equity loan of up to 90% of the amount you own on your home. This percentage is your CLTV (combined loan-to-value) rate. For example, if your home is valued at $300,000 and you have $100,000 remaining on your mortgage, this means you have $200,000 of equity in your home. To find how much you can borrow, start by multiplying your total home value by your CLTV rate. (300,000 x 0.9 = 270,000) Then, subtract the amount you still owe on the original mortgage for your home. ($270,000 - $100,000 = $170,000) The resulting amount is the maximum amount you can take out on a home equity loan.
What is the difference between a home equity loan and a HELOC?
A HELOC and home equity loan are quite similar but the main differences come down to:
- The way funds are distributed. Home equity loans pay you out in an upfront lump sum whereas HELOCs funds are set at a credit limit and you have a limited period where you can withdraw funds.
- The interest rate. Home equity loans are a fixed rate with consistent payments over the loan period. HELOCs are usually a variable rate as it's a revolving line of credit.
- Payment method. With a home equity loan, you make periodic payments over a set time frame. When it comes to HELOCs, you pay back the amount you borrowed once funds are drawn.
Read this article that covers the difference between a HELOC and home equity loan in depth.
What additional fees are there?
Setting up your home equity loan could incur some additional fees, similar to what you could expect when taking out a mortgage. Be sure to ask your lender what you can expect once the process is complete so you're not blindsided by anything. Below are some of the fees you may see when starting a home equity loan. Many of the terms and fees are determined by the lender. Take some time to research these fees and consult with your lender.
- Appraisal fees
- Upfront charges
- Mortgage preparation and filing
What risks come with a home equity loan?
The biggest risk you face with a home equity is if you fail to make your payment, you could lose your house because it’s being used as collateral for your loan. Banks have made strides to protect you from such losses, but the risk still remains in the event you’re unable to make payments.
Read this article that breaks down 4 questions you may want to answer when considering a home equity loan.
Upgrade your home with a home equity loan
We've got your back
We believe everyone should be the boss of borrowing. That’s why we have a team of lending consultants ready to answer questions and help you navigate the process.
*APR — Annual Percentage Rate. Home equity loans are fixed-rate loans. Rates as low as 8.859% APR and are based on the CLTV (combined loan-to-value) and loan term, so your rate may differ. A sample home equity loan based on an 80% CLTV with a loan amount of $100,000 at 8.859% APR for 10 years would have 120 monthly payments of $1,253.27. Taxes and insurance are not included; therefore, the actual payment obligation will be greater. Subject to credit approval.