Home Equity Loans

Home Equity Line

With a home equity line, you only pay interest on the amount you borrow.  You can see the advantage this.  You have the right to draw money whenever you wish over a pre-determined period of time. Normally you draw the money by writing  a check or using a credit card.  So you borrow what you need, pay it off,  and borrow and pay it off again against your line of credit. 

Second Mortgage (home equity loan)

With a second mortgage, you will receive one lump sum of money. Your interest rate is fixed and make you  fixed monthly payments.                     
              

Which type of Loan do you Choose?

In deciding on which type of loan to get, determine how you will use the money.  Probably if you need the money for a single expense such as a swimming pool loan, a room addition, or remodeling, a fixed rate, second mortgage could be your best choice.

What makes a second mortgage very appealing, is the certainty of having a fixed monthly payment and a fixed interest rate.  However, it is not possible to predict if this type of loan will be less expensive then the home equity line with their adjustable rates.

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