Home Equity Line of Credit
A home equity line of credit (HELOC) is a loan that generally requires your home to be used as collateral.
Home equity lines are a common alternative to second mortgages or mortgage refinancing. If a second mortgage is not for you, or if you are unable to lower your interest rate through refinancing, this may be your best option. Once you receive your home equity line of credit, you are free to use the money however you wish: debts, home repairs, college expenses, medical bills, etc... You may be wondering if a home equity line of credit would benefit you more than a home equity loan. A home equity line of credit would give you a maximum loan amount equal to the equity of your home, but you don't have to spend the entire loan.
A home equity line of credit will give you the full amount of your home's equity in one lump sum. Regardless of whether you spend all or barely any of the home equity loan, you will owe interest on the entire loan amount. If you're still not sure, get more home equity loan info here. |
A home equity line of
credit usually provides a large amount of
available cash at the onset of your loan, with a low
interest rate. These loans also may qualify you for tax
breaks. You tax advisor can confirm whether or not you
qualify.
You will only be responsible for repayment of
the amount you actually spent plus interest on that
amount. With a home equity loan, you may end up spending
more than you need to because your loan is for more than
you need.
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Important note: The information on this and all pages on this website contains a summary of basic information on debt and debt consolidation issues. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional advisor to take into account your particular circumstances and to tell you how the law applies to you.