It’s no secret that the housing market is crazy at the moment. Houses are selling at record speed to offers that are well over the asking price. If it’s time to add on to or renovate your home, or you have some major expenses to take care of, look no further than Kinetic Credit Union’s Home Equity Loans. In this blog, we’ll explore everything you need to know about home equity loans and home equity lines of credit (HELOC) so you can feel confident about adding on to or renovating your home, paying off those medical bills, or any other major expense.

What is a Home Equity Loan?

A Home Equity Loan, also known as a second mortgage, is a loan that allows homeowners to borrow  money against the equity, or value (typically up to around 80%), of their own home. In essence, you are taking a loan out and using your home as collateral. This obviously comes will some pros and cons, but we’ll get to those. When a borrower receives a lump-sum payment from a home equity loan, this is known as a closed-end home equity loan. Another option would be a HELOC which is a revolving line of credit such as a credit card that borrows against your home’s equity. Another option is an undeveloped real estate equity loan which rather than borrow against the value of your home, borrows against the value of undeveloped land.

Pros and Cons

Taking out a home equity loan or line of credit has a number of notable benefits. Kinetic Credit Union’s home equity loans can be an easy source of money and a valuable tool for responsible borrowers. These loans often have low-interest rates and can sometimes even be tax-deductible depending on what the funds are used for. For example, if you are looking to pay off credit card debt, taking out a home equity loan could help because the interest rates are much lower than most credit cards’ interest rates. Home equity loans are a great option for borrowers who know exactly how much they need and for what.


The downside to a home equity loan is that is indeed a loan; it does have to be paid back. A common issue with borrowers is that the loan may perpetuate a cycle of debt for those who do not have a steady and reliable source of income. Unfortunately, the consequence of irresponsible borrowing with a home equity loan or HELOC is that your home is your collateral, so defaulting on your loan could result in your home being foreclosed. Another potential con of home equity loans comes if property values were to decrease which may result in the borrower owing more than their home is worth.

Why Kinetic Credit Union?

Despite the cons, a home equity loan is a great option for responsible borrowers who are looking for lower interest rates. Kinetic Credit Union in Columbus, GA proudly offers closed-end home equity loans, HELOCs, and undeveloped real estate loans. Kinetic Credit Union also makes it easy for you! You can now apply online in as little as 20 minutes and receive your decision instantly!


To get started on your home equity loan, contact our Residential Lending Department at (706) 320-8585 or email