Which Loan is Best For You-A Home Equity Loan or a Home Equity Line of Credit?
Tip! Having home improvements is the most recommended reasons to get a home equity loan because it does not only increases the value of your home, it also makes you feel a lot better about your home and it will also make your home look great. When you use a home equity loan you can reinvest it back to your home by increasing the value of your home.
If you don't know the difference between a home equity loan and a home equity line of credit, here's a quick summary of both with their advantages and disadvantages.
A home equity loan is a fixed loan taken out over a fixed period of time and at a fixed rate. The monthly repayments are also fixed for the term of the loan so you know from month to month what you're paying back.
The advantages of this loan are
That unlike your primary mortgage this loan is paid off over a shorter period of time, it varies between 5 - 30 years. You can't borrow more than the amount you have agreed so you can't get further in debt.
The disadvantages of this loan are
You may get carried away and may borrow a little more than you really need to. You can remain in debt by taking out an interest only home equity loan and not paying off the principal amount.
A home equity line of credit can be compared to a credit card; the lender offers you a fixed amount you can borrow up to in a certain time limit. These time limits can vary from lender to lender. You get a fixed period of time you can borrow for and then a fixed period you to pay off your loan.
The advantages of this loan are
You don't ever need to borrow the full amount offered. You can pay off the full amount and if you are still within the borrowing time limit, you can borrow the same amount out again. It's more flexible than a home equity loan.
Tip! Some lenders of home equity loans offer low introductory rates that might look like a great deal but these deals usually revert automatically to higher home equity loan interest rates.
The disadvantages of this loan are
You are never on a fixed interest rate, your repayments vary from month to month. Some lenders require a small up front payment before using the loan You may only be able to borrow a minimum amount each time and have a minimum remain balance.
And finally, as with all loans, always be on the lookout for the best deals and make sure you can afford it before taking either loan out.
For more free home equity loan advice and information visit http://www.allabouthomeequity.com for details.
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Home equity loans drying up for some - Business - Personal ...
Like many homeowners during the housing boom, Lynnette Madden and her husband decided to open a home equity line of credit about a year and a half ago as ...
Americans' home equity near a record low - Business - Real estate ...
WASHINGTON ? Falling U.S. home prices have shrunk equity so much that the proportion of their homes that Americans actually own is near its lowest point ...
Students get creative to pay off loans - Business - Personal ...
Lines of credit typically work like a credit card, with a limit and a revolving balance: the average home-equity line of credit currently has an interest rate ...
Late payments for home equity loans rise - Business - Real estate ...
WASHINGTON ? Late payments on home equity loans climbed to a 1½-year high in the opening quarter of this year, while delinquencies on credit card bills ...
Home equity lines have dried up across U.S. - Business - Personal ...
Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy Below:
The Home-Equity Credit Crunch (Opinion) - Business - Small ...
The Home-Equity Credit Crunch (Opinion) How home price declines have contributed to tight credit for small businesses. Below:
Late payments rise on home-equity loans - Business - Stocks ...
Late payments on certain auto and home equity loans climbed in the final quarter of last year, while delinquencies on credit card bills largely held steady ...
Should I get a home equity credit line? - Business - Answer Desk ...
Nov. 5, 2004 ? Q: Would you please explain to me the pros and cons of acquiring a home equity credit line?... How does it affect your taxes?
Homeowners feel stress of life 'underwater' - Business - Real ...
A broad swath of homeowners ? those not headed for the worst-case scenario of foreclosure ? are nonetheless grappling with the impact of lost home equity.
Retirees no longer count on home equity - Business - Personal ...
Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the ...
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