Home Equity Lines of Credit vs. Home Equity LoansBy Sheryl Landrum
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Homeowners looking for cash often use their home's equity by taking a second mortgage instead of refinancing their first mortgage. There are two low cost second mortgage products available--a home equity line of credit and a home equity loan. Here's what you should know about them.
A home equity loan second mortgage is for those who like to budget and have consistency. Home equity loans are fixed rate mortgages, amortized over thirty years and due in fifteen years. The starting interest rate is generally lower than a home equity line of credit and the payment doesn't change -- which many borrowers appreciate. The qualifying interest rate depends on the same criteria as the home equity line.
Talk to your loan officer or financial advisor today to determine the best new home loan for you.
About the Author
Sheryl Landrum is a Senior Loan Officer with Charter Funding, Inc. in Carlsbad, California and a freelance writer on mortgage issues.
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