Home Equity Loan or Home Equity Line of Credit - Which is
right for you?
The most common type of home equity loan is the term loan.
This loan is set for a fixed amount of time, anywhere from five
to fifteen years. Such loans are typically granted for up to 80%
of the value of the home, but some lenders will lend up to 125%
of the home's value.
Is this type of loan right for you? The term loan works best for
those who need to borrow a fixed amount of money for a specific
purpose - paying for a wedding, a home remodeling project, a
fixed educational expense, or debt consolidation. This
would give the borrower a fixed repayment schedule, where he or
she would pay a set amount of money each month for a specific
period of time.
An increasingly popular alternative to the home equity loan is a
line of credit. This type of loan works like a credit card, and
has a revolving line of credit, in which the borrower may borrow
against the principal more than once over the life of the loan.
The borrower is usually given special checks that he or she may
use to write checks against the loan amount. The borrower may
borrow a little at a time, or borrow all of the loan amount at
once. Unlike the term loan, the interest rate on lines of credit
tends to be variable. This type of loan works best for recurring
expenses - a complicated remodeling project accomplished in
several stages, or a recurring educational expense such as annual
Each type of loan has its advantages and disadvantages; you
simply need to decide if you want a fixed interest rate and fixed
payments, or more flexibility in terms of when and how you pay.
Your needs will determine which type of loan is best for you.
Either way, under current Federal law, the interest on a second
mortgage is deductible from your income taxes up to $100,000.
©Copyright 2005 by Retro Marketing. Charles Essmeier is
the owner of Retro Marketing, a firm devoted to informational
Websites, including http://www.End-Your-Debt.com/
MORE RESOURCES updated Sat. June / 03 / 2023
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One of the things that bothers me about the mortgage
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This post is a must read for anyone considering purchasing
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Refinancing your home or property is a big decision that
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Should You Get an
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Before you consider taking out an interest-only mortgage,
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Cardinal Principle of
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Treachery: Avoid Mortgage Bankers and Brokers Biggest Trick
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What the average homeowner or home buyer fails to realize
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The popularity of stores like Home Depot and Lowe's show
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Remortgage Serves To
Rewind The Reimbursements Of Mortgage
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A Personal Mortgage
I don't know what the mortgage situation is around the
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