Get a Home Equity Loan in 2024: How It Works

A Home Equity Loan is One Way to Tap Into Your Home's Value Without Having To Sell It

Created: March 7, 2024 by Steven P

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Intro

In the Philippines, a home equity loan offers a means to leverage the value of your home without the need to sell it.

As you steadily make mortgage payments and the value of your property appreciates over time, your equity in the home increases.

Opting for a home equity loan allows you to convert this equity into debt in exchange for cash. Homeowners in the Philippines often consider home equity loans for various purposes, especially home improvement projects aimed at increasing the property's value.

Since your home serves as collateral for a home equity loan, failing to repay could lead to foreclosure. If you're contemplating this financial option, it's essential to understand its dynamics.

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What is a Home Equity Loan?

To get a home equity loan in the Philippines will enable you to access a portion of your home's equity as a lump-sum payment, which you repay at a fixed interest rate over an agreed period, typically between five and 15 years, with some lenders offering terms up to 20 years.

Most lenders require a minimum of 20% equity in your home, allowing you to borrow up to 80% of the home's value.

For first-time home buyers, options might be limited due to higher combined loan-to-value limits.

As you continue to pay down your mortgage and property values rise, your equity grows, making you eligible for a home equity loan sooner.