Owning a home is more than just having a place to call your own, it’s about having security. Over time, your home builds value, and that value becomes home equity – a financial resource you can tap into when you need it most. By using home equity, you can do more with what you’ve already built.
Whether you’re dreaming of transforming your living space, tackling home improvements, or consolidating your debt into one manageable payment, home equity financing puts your goals within reach.
At Members 1st of NJ Federal Credit Union, we’re here to make the process simple, affordable, and centered around YOU. Our member-first approach ensures you get the support and solutions you need every step of the way. If you’re considering a home equity loan, here’s what you need to know.
What Is Home Equity?
Home equity is the portion of your home that you truly own. It’s calculated by taking your home’s market value and subtracting what you still owe on your mortgage.
For example:
- Your home is worth $300,000
- You still owe $180,000
- You have $120,000 in home equity
You can borrow against that equity to help fund large expenses. A home equity loan typically comes with a fixed interest rate and consistent monthly payments, making it ideal for homeowners who want predictable financing.
What’s the Difference Between a Home Equity Loan and a HELOC?
While both allow you to borrow against your home, they work in different ways:
Home Equity Loan
- Lump sum payment up front
- Fixed interest rate
- Fixed monthly payments
- Ideal for one-time expenses like home improvements or debt consolidation
HELOC (Home Equity Line of Credit)
- Works like a credit card, where you borrow as needed
- Variable interest rate
- You pay interest only on what you use
- Ideal for ongoing or unpredictable expenses
At Members 1st, we currently offer fixed-rate Home Equity Loans, giving you reliable payments that won’t fluctuate over time.
Why Using Home Equity Over Credit Cards or Personal Loans is Better?
When it comes to financing big expenses, the cost is a game-changer, and that’s where using home equity shines. Home equity loans are secured by your home, which allows lenders to offer much lower interest rates compared to unsecured debts like credit cards or personal loans.
For perspective, at the time of publication, the national average interest rate for a 10-year home equity loan is about 8.38%, while credit cards average a steep 20.12%. That’s a significant difference that could save you thousands over time. By choosing a home equity loan, you’re not just borrowing smarter; you’re creating a more affordable and predictable financial future. Why pay more when your equity can work for you?
There may also be potential tax benefits. If you use the funds for home improvements, the interest you pay might be deductible under IRS guidelines. (Be sure to check with a tax advisor to see what applies to your situation.)
Common Ways to Use Home Equity
Your home’s equity holds the key to so many possibilities! With home equity financing, you can tackle major life goals like:
- Home renovations or upgrades – Such as new kitchen, roof repairs, or energy-efficient windows
- Debt consolidation – Combine high-interest credit cards into one manageable payment
- Education expenses – College tuition or career training
- Emergency expenses – Unexpected medical costs or home repairs
Using home equity instead of high-interest loans or credit cards can save you money and provide a more predictable financial path forward.
Choose Members 1st
As a local credit union, Members 1st of NJ is committed to helping South Jersey homeowners get the most from their finances. Unlike big banks, we’re member-owned, not-for-profit, and here to serve your best interests.
- Competitive rates
- No hidden fees
- Local service from real people
- Nationwide shared branching for your convenience
We’ll walk you through your options, explain the numbers, and make sure your loan works for your goals.
Act Now! Rates Won’t Last Forever.
Right now, Members 1st is offering special rates on Home Equity Loans through June 30. It’s a great time to lock in an affordable loan before summer projects or back-to-school expenses roll in.
Ready to Get Started?
You can apply online in minutes: Apply for a Home Equity Loan Now
Or stop by our Vineland or Bridgeton branches to speak with someone in person. We’re here to help. No pressure, just honest advice.