Home Equity Loans
Equity Loan Info:
Loan or Line?
-HELOCs for Emergencies
-Home Improvement Loans
-Loans vs. Line of Credit
-Downside of Equity Loans
EQUITY LOAN OR LINE OF CREDIT?
The decision between a
line of a credit and an
equity loan can be quite confusing. What your needs are will be
the most detrimental factor in your choosing process.
If you plan on using the money you receive in a lump sum for a
one-time situation such as
making a home improvement,
consolidating credit card debt, or paying for a wedding, then an
equity loan is likely your best choice. Interest rates are fixed,
and so are the monthly payments, allowing you to
A home equity line of credit, commonly known as a HELOC, may be a
better solution for your financial needs if you necessitate money
occasionally and not all at once. For example, a home remodeling
project often take a long time, resulting in you paying your
builder in several draws. Or, maybe you need cash at the
beginning of every semester to
pay for your child's tuition. A home equity line of credit
offers the flexibility to borrow as much as you need, when you want.
Below are a few questions and answers that will help you choose the
right loan for your needs. If you have any questions, please
Get more info
equity loans vs. lines of credit.
Q: Will receiving the money in a lump sum satisfy my needs? Or
will I need several installments?
A: If you are looking for a lump sum,
apply for a home equity loans. If you are looking for receiving
money in installments,
apply for an equity line.
Q: Is the intent of my loan for a short-term or long-term
A: If you are going to use the money on something that is going to
last a long amount of time, i.e. a new pool or automobile, then an
equity loan is a better choice. On the contrary, if the money is to
be spent on something that will last a short time, like a vacation,
wedding, or semester at school, consider applying for an equity line
Q: How much can I afford for my monthly payments?
A: You will be required to pay principal plus interest every
month for the life of your equity loan. An equity line of credit
permits you to pay only interest for the first few years of the
Q: How tempting is it going to be use the money from an equity
line of credit recklessly?
A: If you have even the slightest concern that careless spending may
occur, then consider applying for a home equity loan since you will
be paying off the principal and interest over time, and you won't
have access to a revolving line of credit.
Q: Am I going to be bothered by a variable rate?
A: The interest rate associated with almost every type of equity
line is going to change every time the Federal Reserve raises or lowers
the federal funds rate. If an
adjustable rate mortgage bothers you, then consider equity loans
with fixed rates.
You can learn more about the different equity loan/line types we
offer. If you have any questions, please