Kansas Home Equity Loans

A home equity loan works by using a homeowner’s accrued equity as the collateral for a secured loan. The amount of equity is calculated by taking the home’s current value and subtracting the remaining mortgage. Home equity loans in Kansas can be issued for up to 90% of the total equity, giving borrowers the chance to make large purchases quickly.

Home equity loan rates in Kansas City and beyond have the advantage of being available as a fixed-rate structure. This, along with a repayment term of as long as 40 years, means borrowers can enjoy a low, predictable monthly payment and the opportunity to attain financial goals without straining their budget.

Both a home equity loan (HELOAN) and a home equity line of credit (HELOC) offer unique ways for homeowners to use their equity to secure financing at competitive rates. The choice between the two comes down to how you plan to utilize the funds.

• Home equity loan: You can think of a HELOAN similarly to a traditional secured loan, except the collateral in this case is the home equity. A Kansas home equity loan offers competitive, fixed interest rate options and longer repayment terms (up to 40 years). Funds are issued in a lump sum, and can be used however you wish with very few exceptions.

• Home equity line of credit: A home equity line of credit functions similarly to a credit card. Your credit limit is largely dictated by your home equity, and HELOC rates in Kansas City and other areas are typically much more favorable than with credit cards. With a HELOC, you have the flexibility to make small purchases as necessary, and pay down your revolving balance along the way.

When deciding between a HELOC vs HELOAN, it is important to know your intended use of the funds prior to applying. If you are borrowing the money for a specific or expensive purchase, such as home improvements, a new car, university tuition, or debt consolidation, then a home equity loan in Kansas may be the best choice. But if you are looking for a more flexible solution that allows you to borrow against your equity on an as-needed basis for smaller purchases over an extended period of time, a home equity line of credit in Kansas may be just right.

When you tap into your equity with a Kansas home equity loan, you will enjoy several benefits over traditional secured loans. However, you should understand any potential downsides, as well. Here are some important points to consider when deciding:

Pros:

• Lump-sum disbursement means you get your entire loan in one quick deposit, giving you the freedom to make large or important purchases quickly.
• Competitive fixed rates, contracts of up to 40 years, and predictable monthly payments make Kansas HELOANs easy to budget for.
• Securing a Kansas home equity loan will not alter your original mortgage in Kansas, meaning you get to keep that low rate and payment that you’ve already been enjoying.
• The interest you pay on your home equity loan may be tax deductible.
• Applying HELOAN funds toward home improvements can increase your property’s value in the long run.

Cons:

• Home equity loan rates in Kansas will often be higher than your existing mortgage loan.
• A home equity loan can increase your overall debt burden.
• Because you are using home equity as collateral, you risk losing your home if you default on the loan.

Lenders will look at a mix of your personal credit, income, and home equity when taking your application into consideration. Here are three of the most important factors to consider before applying:

• Credit: Maintaining a good credit score is crucial to obtaining a competitive HELOAN approval in Kansas. Your FICO should be at least 640, and you should aim to have a debt-to-income ratio (DTI) below 43% for the best chances at getting the loan. If you’re still building your credit or are unsure of its status, download the Griffin Gold app to monitor your credit, compare mortgage options, and get tips on creating the strongest possible application.

• Income: Steady employment and income are important factors when lenders consider you for approval. You’ll need to provide W-2s, pay stubs, and tax returns to show reliable income and the ability to comfortably repay the loan over time. For those who are self-employed, Griffin Funding offers a bank statement home equity loan that allows you to verify income using a series of bank statements instead of the usual pay stubs.

• Equity: Generally, you’ll need to have accrued at least 15%-20% equity in your home before being considered for an approval. For a well-qualified borrower, the maximum loan amount will usually be up to 90% of your total equity.

Securing a home equity loan in Kansas can be a smart alternative to traditional loans when it comes to making large purchases or consolidating high-interest debt into a single monthly payment. With Griffin Funding as your financing partner, you can leverage your equity to lock in a home equity loan loan that enables you to achieve your financial goals.

When you apply for a home equity loan, you are taking the first step toward tapping into your equity and making it work for you. Our knowledgeable loan agents will walk you through the process and help find the program that best fits your needs and budget.