Home Equity Loans VS Home Equity Lines Of Credit

Working as a financial consultant, I get hundreds ofWhat use can the borrower give to the money? Well,
emails and calls everyday inquiring about manythat is the beauty of this type of loan. You can do
different financial products. I have noticed that homeanything, the world is your oyster! Whether you need
equity loans are a very common source of doubt forto remodel your house, add rooms to it, go away on a
my customers. As regards home equity lines of credit...long vacation, purchase a used or new car, or even
well, let us just say that great many people do notacquire a second property, home equity loans can help
even know of their existence. It is a real pity that theseyou in so doing. There is no limit to what you can do,
products are not better known because they areonly your imagination.
incredibly versatile as they can be used for manyRepayment plans range from 5 to 20 years, and as
different purposes. They are also very cheap sourcesyou might have noticed, they are somewhat shorter
of finance.than the repayment plans on mortgage loans.
That is why I decided to write an article on the basicHome Equity Lines Of Credit
concepts of both of these fantastic financial products.This credit is also know as an open-end home equity
Home Equity Loanloan. It is also a loan based on the equity on your
Home equity loans are usually referred to as secondhome, but it has one major difference: you decide how
mortgages, because they are secured against themuch and how often to withdraw funds. The lender
value of the house. The borrower uses the equity onsets a limit on how much can be withdrawn, but once
his property as a collateral for the loan. So... what doesthis amount is repaid, the borrower can take out funds
equity mean? Equity is the different between theagain, and so on.
property's market value and the remaining balance ofLines of credit based on equity are perfect for you if
the mortgage and any owed debts related to theyour monthly income is variable (as often happens with
property. If you have finished paying the mortgage onself-employed people). There is a minimum monthly
your home (or never applied for one), then the equitypayment which consists of the interest rate if you
on your home is 100% of the real value. If you havehave not withdrawn any funds.
already paid 40% of the home, then the equity will beIf what you are looking for is flexibility, then a line of
worth 40% of the real value of the property.credit will be just perfect for you. No fixed monthly
Loans based on the equity on your home arepayments, instant availability of funds at your best
marvellous. They are granted almost to any homeconvenience, among other advantages.
owner and their terms are usually extremelyNow you are fully aware of what these two equity
favourable. Not only are the interest rates very low,based credit products have to offer, it is up to you to
but they are also deductible!choose the one which best meets your requirements.