Home Equity Line of Credit

Lines of CreditHome equity is the difference between what you owe on your mortgage, and other home loans, and the market value of your property. You build equity as that difference grows larger when you repay mortgage principal to decrease the amount you owe, or when your home’s market value increases.

You can borrow against that equity when you need cash, using either a home equity loan or a line of credit.  Both offer a number of advantages over other types of financing.

Home equity loans and lines usually have much lower interest rates than other types of financing, such as credit cards and personal loans.
Tax benefits. Like your first mortgage, the interest you pay on a home equity loan or line is usually tax-deductible.

Let's Compare Home Equity Loans and Credit Lines



 Home Equity Loan

 Home Equity Line of Credit

You Get 

A single lump-sum payment for the full loan amount.

A revolving source of cash that you can draw from as needed.

Online access to your cash.
Using it To finance large one-time expenses that have a definite cost. To finance ongoing expenses or  miscellaneous purchases, like you would use a credit card
Paying Back Repay the full loan amount over a specific time period, at a fixed interest rate
Make payments on the outstanding balance, at a variable interest rate
Benefits It offers simple repayment terms, and the security of knowing your payments will never increase.
It’s there when you need it, and you only make payments on what you use.