What is a Home Equity Loan (HELON) — And Is It Right for You?
If you’re a homeowner looking for a predictable, lump-sum loan based on the equity in your home, a Home Equity Loan (HELON) could be a smart financial move.
Unlike a HELOC, which offers a revolving line of credit, a HELON gives you a one-time disbursement with fixed payments and a fixed interest rate.
What is a HELON?
A Home Equity Loan lets you borrow a portion of your home’s equity—usually up to 80–85% of your home’s appraised value, minus what you owe on your mortgage.
You receive the loan amount upfront and pay it back in monthly installments, typically over 5 to 30 years.
Common Uses for HELONs:
- Home improvements (kitchens, bathrooms, additions)
- Medical expenses or emergency bills
- College tuition or educational costs
- Debt consolidation at a lower interest rate
- Major life events like weddings or family support
Qualifications — Do You Meet the Criteria?
To qualify for a HELON, we typically look for:
- Equity: We can go up to 95% of the home’s value, with approved credit and income
- Credit Score: 620 or higher
- Debt-to-Income Ratio (DTI): Usually below 50%
- Stable Income: Proof of employment or consistent income
- Good Payment History: A solid mortgage and credit repayment track record
Benefits of a HELON:
- Fixed interest rate = predictable monthly payments
- Lump sum payout = great for large, one-time expenses
- Lower interest than personal loans or credit cards
- Potential tax deduction on interest (consult a tax advisor)
This offer is made by Better Lending who is not an agency of the federal government, nor affiliated with your current lender. The loan information used in connection with this offer was derived from the credit bureaus (Experian, Trans Union and Equifax). This is not a commitment to make a loan.
*This is not a guaranteed offer, but an advertisement to lend. To qualify you will need to provide criteria including an acceptable property appraisal, and sufficient property collateral, as well as verification of personal income, sufficient credit history and clean property title. Not all programs are applicable to all borrowers and rates are subject to change at any time based on market conditions and borrower eligibility. This is not a commitment to lend. Nothing herein shall be construed as an offer to lend nor a commitment to lend, the above statements are examples of possible scenarios.
** Better Lending is not a government agency or affiliated with a government agency.
***All above interest rate scenarios assume a rate and term of refinance single family detached, owner-occupied residence with, credit score above 740, $300,000 loan amount, Loan-to-value ratio of 75 percent or less. $1495.00 for processing and underwriting fees, two discount points as of notice date, and the establishment of an escrow account. All the above rates and savings estimated are examples consistent with the prior description.
ⁱ Interest rate and payment scenario listed contains closing costs
⁺ Up to $500 credit applied as a lender credit towards appraisal at time of closing
V2019-11-26
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