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 One main difference between a home equity line of credit and a home equity loan is that the money is not dispersed by the lender all at once. The money is available similar to a credit card account. It can almost be described as a credit account with a large credit limit and a low interest rate. A home equity line of credit differs from a standard credit account because it has a term in which money can be borrowed. The term varies quite a bit and is often between 5 to 25 years. When that term expires the balance of the loan is due in one lump sum or according to a loan amortization schedule. Using the credit line for everyday purchases is not recommended. Many homeowners reserve their credit line for large purchases such as college education, medical expenses, home improvements, and investments. There are many advantages to having equity in a home and it should only be drawn out on items that are very important. |