| Once you have built up equity in your
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| | equity line of credit is an " on demand"
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| home, you have the privilege of applying
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| | source of funds that you can access and
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| for a home equity line of credit, which
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| | pay back as needed. You only pay interest
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| allows you to borrow the money you need.
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| | if you carry a balance because these line
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| Most financial insititutions ( banks,
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| | of credits are essentially a revolving
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| savings and loans ) have entered the home
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| | line of credit, like a credit card but
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| equity market, so you have plenty of
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| | with a much lower rate because the line
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| options when you shop for the best loan.
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| | of credit is secured by your home. Like
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| In effect, a home equity loan is a second
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| | other mortgages, the home equity loan
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| mortgage on your home. You usually get a
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| | requires you to go through an elaborate
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| line of credit up to 70 percent or 80
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| | process to qualify for an open line of
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| percent of the appraised value of your
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| | credit. You will usually need a home
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| home, minus whatever you still owe on
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| | appraisal and must pay legal and
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| your first mortgage. For example, if your
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| | application fees and closing costs.
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| home is worth $100,000 and you owe
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| | Because a home equity loan is backed by
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| $20,000 on your mortgage, you might
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| | your home as collateral, it is considered
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| receive a home equity line of credit for
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| | more secure by lenders than unsecured
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| $60,000 because your lender would
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| | debt, such as credit card debt. Further,
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| subtract your $20,000 owed on the first
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| | because the loans are less risky for
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| mortgage from your $80,000 worth of
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| | banks, you benefit by paying a much lower
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| equity. You will qualify for a loan not
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| | interest rate than you would on credit
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| only on the value of your home but also
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| | cards or most other kinds of loans. Home
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| on your creditworthiness. For instance
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| | equity loans can therefore offer
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| you must prove that you have a regular
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| | extremely attractive rates when the prime
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| source of income to repay a home equity
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| | interest rate is low, but subject you to
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| loan. The difference between the two kind
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| | much higher interest costs if the prime
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| of credits is easy: the home equity loan
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| | shoots up. You can tap the credit line
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| has a fixed rate and the home equity line
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| | simply by writing a check, and you can
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| of credit has a rate that fluctuate and
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| | pay back the loan as quickly or as slowly
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| it's better indicate to consolidate other
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| | as you like, as long as you meet the
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| debts than the credit cards. The home
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| | minimum payment each month.
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