Midstates Home Equity Loans: A Powerful Financial Tool 

The equity you have in your home can be a powerful tool in managing your overall financial situation. Your equity, the value of your home minus your existing mortgage, can serve as collateral for additional borrowing. While there are some risks with this strategy (as with any borrowing), home equity loans usually offer the attractions of lower rates, convenience and often tax benefits. 

 

How does a home equity loan work? 

Midstates Bank views home equity as good collateral and is willing to lend you money against that equity. It's simple to apply for a home equity loan.  You have some forms to sign and an approval process that is relatively easy. 

 

The amount that you can borrow depends on the amount of equity in your home and your other credit characteristics. A general rule of thumb is that you can borrow up to 90% of your home's equity (including the first mortgage and any other loans where your home is pledged as collateral).  

 

Attractions of Home Equity Loans 

 

Convenience - Midstates Bank makes it easy to apply for a home equity loan.  The process of applying for a home equity loan is often simpler than if you were applying for a new mortgage. 

 

Interest rates - The interest rates charged on home equity loans are usually less than rates on your credit cards. Using the proceeds of a home equity loan to pay off credit card debt may save you money. 

 

Tax benefits - For individuals that itemize their tax deductions, the interest paid on home equity loans can help to save some income tax, although there are some limits on this type of interest deduction. Consult with your tax advisor for more details. 

 

Flexible uses - Even though you are borrowing against your house, there is no requirement that the money be used on your house. A home equity loan can be used for college tuition or even to buy a car. Compare the rates on an auto loan and a home equity loan the next time you are financing a car.  

 

Beware of the risks - Borrowing against the equity in your home should be considered carefully. Even though there are benefits, these types of loans are like other loans - you pay interest and they must be paid off. Most people use home equity loans for "conservative" purposes and avoid making risky investments or extravagant spending with the proceeds. 

 

Come in today and visit with your personal banker about your different options.