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© 2007 - LoanQuotes.com
For concise advice regarding your own financial situation please consult with your own financial advisor.
Home | About us | Contact | Privacy Policy | Terms of Usage | Sitemap
© 2007 - LoanQuotes.com
Home Equity Loan and Line
By LoanQuotes.com
There are basically two types of Equity Loans that you can obtain - that is, loans for borrowing against the equity value of your property.
Home Equity Loan - Explained in the first part of this article
Home Equity Line of Credit also known as HELOC
Both type of loans are given with your property as collateral and are also widely referred to as second mortgages.
A home equity loan -line of credit, is a second mortgage that gives you the opportunity you turn equity into cash, giving you the opportunity to make the changes in your home you have always wanted to do but was not able to due to shortage of funds, to have other debts like credit card payments and other type of expenses all tied up in one payment based on the equity of your property.
This way you have less creditors and less paperwork to follow up on and not to mention the overall size of your monthly payments is going to be reduced.
A home equity line of credit also known as HELOC has the same type of characteristics of a credit card because it has a revolving balance.
With a HELOC you are allowed to borrow up to a certain amount for the life of the loan combined with a time frame determined by the lender, within that time frame you are allowed to get funds whenever you need it.
Since you are paying off the principal you can use the given credit again similar like a credit card.
Flexibility is our keyword when talking about HELOC type of credit solutions, as rates differ according to the amount you would still owe as well as what stage your credit line is in, being this in the draw period or repayment period.
Draw and flexibility periods varies on which lender you have chosen to obtain the loan from, most often this balances between 5 and ten years and repayment periods vary between 10 and 15 years.
Within the draw period you can choose only to pay interest or do both, paying also an amount to cover the principal.
Within the repayment period you're not allowed to draw credit anymore and you have to pay off the remaining balance for the rest of the life of the loan.
So, a home equity loan and line differ in nature and that is certainly something to think about when commiting yourself to this type of credit solution.
By LoanQuotes.com
There are basically two types of Equity Loans that you can obtain - that is, loans for borrowing against the equity value of your property.
Home Equity Loan - Explained in the first part of this article
Home Equity Line of Credit also known as HELOC
Both type of loans are given with your property as collateral and are also widely referred to as second mortgages.
A home equity loan -line of credit, is a second mortgage that gives you the opportunity you turn equity into cash, giving you the opportunity to make the changes in your home you have always wanted to do but was not able to due to shortage of funds, to have other debts like credit card payments and other type of expenses all tied up in one payment based on the equity of your property.
This way you have less creditors and less paperwork to follow up on and not to mention the overall size of your monthly payments is going to be reduced.
A home equity line of credit also known as HELOC has the same type of characteristics of a credit card because it has a revolving balance.
With a HELOC you are allowed to borrow up to a certain amount for the life of the loan combined with a time frame determined by the lender, within that time frame you are allowed to get funds whenever you need it.
Since you are paying off the principal you can use the given credit again similar like a credit card.
Flexibility is our keyword when talking about HELOC type of credit solutions, as rates differ according to the amount you would still owe as well as what stage your credit line is in, being this in the draw period or repayment period.
Draw and flexibility periods varies on which lender you have chosen to obtain the loan from, most often this balances between 5 and ten years and repayment periods vary between 10 and 15 years.
Within the draw period you can choose only to pay interest or do both, paying also an amount to cover the principal.
Within the repayment period you're not allowed to draw credit anymore and you have to pay off the remaining balance for the rest of the life of the loan.
So, a home equity loan and line differ in nature and that is certainly something to think about when commiting yourself to this type of credit solution.