Mortgage RefinancingHome Loan Mortgage Refinancing, Home Equity Line of Credit, Debt Consolidation, Home Purchase Mortgage Loans |
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Home Equity Line Of Credit Loan Advantages Because a home equity line of credit is secured by the equity in a homeowner's home the risk for the bank is reduced. This results in much lower interest rates over a credit card account. In some cases credit cards can have an interest rate around 20% for a borrower and the same individual that applies for a HELOC would get a rate closer to 5%. This translates into major savings in interest over the life of the loan. The more equity a homeowner has in their home the more money they can borrow. It is extremely rare for a bank to offer a credit card with a maximum balance over $100,000 to an individual but with a home equity line of credit it is quite common for a bank to offer a credit line of $100,000+. In fact, banks often advertise rates for $100,000 HELOC lines and $250,000 HELOC lines in their banking centers. HELOC's also have excellent tax advantages. Just like a standard mortgage loan, all interest paid can be written off on personal tax returns so loan as there is still equity in the home. Depending on the size of the loan this major advantage could result in thousands of dollars in savings per year. Home equity line of credit loan advantages including lower interest rates, high loan amounts, and tax savings make home equity lines of credit a great option for homeowners. The security the banks have knowing the loan is backed by real estate make it possible for them to offer much more money at much lower rates. |