What is a home equity loan vs. home equity line of credit?
A home equity loan is a loan, which amount equals a price of your home. For example, if you need to make an expensive purchase you can take a home equity loan, but’s risky enough because in case you will fail to repay you may loose your home. And home equity line of credit is a line of credit secured against your home, so if you take out a loan you get all the money at the same time, and HELOC allows you to use ammount by parts and in occasions when you need it. It can be a good option, for example if you make a home renovation and need large amount of money available to make necessary purchases from time to time. But once again, such loans should be considered as a long term solution, if you need short-term cash loan, then it’s better to consider another option.
A home equity loan or home equity line of credit allows you to borrow money by offering the equity in your property as collateral for the new loan usually as a 2nd positioned mortgage. Unlike a fixed 2nd mortgage where the borrower receives a lump sum and makes fixed payments for a specified term (usually 15, 20 or 30 years); the home equity line of credit allows you to make payments only on the amount you draw from the account. It literally is a credit card attached to your home with all of the benefits; such as a much lower rate and possible tax deductions. Call our office for more information on our very popular fixed rate 2nd mortgages and our home equity lines of credit at 1-321-987-9876. What is a “B”, “C”, or “Portfolio” mortgage? Mortgages which meet the usual standards for credit and property are typically called “A” paper mortgages. Loans which do not meet these standards are referred to as “B”,”C” or “Portfolio” type mortgages. The interest rates for these types of mortgage
