Tap into my Home's Equity?
Why should I tap into my home's equity?
With a home equity loan - also known as a second mortgage, term loan or equity loan - a mortgage lender lets a homeowner borrow money against the equity in the home.
- Why should I tap into my home's equity?
- What's the difference between a Home Equity Line of Credit and a Home Equity Loan?
Tap into my Home's Equity?
Why should I tap into my home's equity?
It's far less expensive to borrow money from the equity in your home than to pay the high interest rates charged by credit card companies. You can use the equity in your home for major expenditures like home improvements, automobiles, weddings, college tuition or a dream vacation. You may also use it to consolidate high-interest credit card debt. Furthermore, the interest on home equity loans and lines of credit is often tax-deductible. Consult your tax advisor for more details.
What's the difference between a Home Equity Line of Credit and a Home Equity Loan?
A Home Equity Line of Credit is a revolving
line of credit that works like a credit card. You use the money as you need it, repay all or a portion of it and use it again as often as you'd like.
You only pay interest on the amount you use, and the interest rate will fluctuate according to financial market conditions.
A Home Equity Loan works like a fixed-rate first mortgage in which all the funds are disbursed at closing and the loan is paid off in monthly installments.
Interest on both Home Equity Loans and Home Equity Lines of Credit may be tax-deductible. Consult with your tax advisor to see if you qualify.
