5/27/2017

MoneyMatters101.com Home
Loan Information

Avoid Loan Fraud
Bridging Loans
Business Loans
Debt Consolidation
Elective Surgery
Fair Lending Practices
Fannie Mae
FHA Loans
FHA Loan Changes
Foreclosure Loans
Freddie Mac
Home Equity Loans
Home Loans
Interest Rate Factor
Loan Modification Act
Loans
Loan Terms
Loans To Avoid
Negotiate A Modification
No Deposit Loan
Payday Loans
Payment Protection
Personal Loans
Predatory Lending
Processing Loans
Refinance
Refund Loans
Sallie Mae
Secured Loans
Should I Refinance?
Subprime Loans
Types of Loans
Unsecured Loans
Unsecured Loan Info
Use Equity Wisely
VA Loans
Which Loan Is Better

Links

Email Us

Investment Vehicles
Mortgage
Protect Your Capital

Quotes

MoneyMatters101



 

Home Equity Loan vs Home Equity Line Of Credit
by: Gary Gresham

Many people confuse a home-equity line of credit with a home-equity loan. With so many different kinds of loans it can get confusing. So lets look at the difference so you can get a better understanding of what works best for you.

Home Equity Line Of Credit

Home-equity lines have experienced unprecedented growth in the past two years and presently represent 80 percent of the home-equity market.

A home-equity line of credit is a varible interest rate loan that works like a credit card. You get a pre-determined loan amount that is secured by your home.

Most come with checks and credit cards that you can use to draw on as you need the money.

Most lenders only require an interest only payment for either 10 or 15 years. After that the loan must be paid in full. The reality is most people will sell their home and pay the loan off before it actually comes due. You could always refinance if you decide you want to stay in your home.

An important thing to remember on a home-equity line of credit is it is based on varible interest rates. These varible rates will cause your payment to change as the interest rates move up or down.

Home Equity Loan

A home-equity loan has a fixed interest rate and fixed payment. These loans are more like a standard second loan on your home. Like a home-equity line of credit, these loans are also secured by your home.

You borrow a certain amount of money for a specific period and get the whole sum at the close of the loan. The payments a on home-equity loan are typically based on 10 to 15 years and are level.

People who aren't comfortable with an adjustable or varible rate payment tend to favor a home-equity loan instead of a home-equity line of credit. As interest rates rise, these loans become more popular than home-equity lines of credit.

A home-equity loan will have a higher interest rate because it is fixed. Varible rate loans usually have lower starting interest rates. But if interest rates are rising, a varible rate could catch up or even get higher than what the fixed rate is.

About The Author

Gary Gresham is a mortgage loan officer and the webmaster for http://www.1stopshoppingonline.com. He offers you purchase, refinance, debt consolidation or home equity loans at competitive rates at http://www.1stopshoppingonline.com/home-loan.html

Gary@1stopshoppingonline.com

Reprinted from ArticleCity.com

 

Book of the Month

Advertise on MoneyMatters101.com

 

Share


Accessibility Policy| Terms Of Use| Privacy Policy| Advertise with Us| Contact Us

Use of this web site constitutes acceptance of the Terms of Use.

We are looking to create more mutually beneficial partnerships. If you are interested in partnering with MoneyMatters101.com, send us your proposal.

MoneyMatters101.com™

Link to MoneyMatters101.com