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Is a home equity loan the better option? OR a home equity line of credit???

by vero.vega947 from Alexandria, Tennessee. Nov 11th 2015 Reply


Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,224 contributions

Really depends on the details of the offers and your needs/preference. Usually the line of credit has a very low floating rate and you can draw more money as you need it, or pay it back as just interest or large principal payments. A loan is a fixed rate and fixed term for a specific amount. The rate will definitely be higher but interest rates are likely to increase quite a bit on a line of credit over the coming years too.

Nov 12th 2015
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Susan Ledingham (perfection)
#892 ranked lender in California - 7 contributions

Some people get confused....a home equity and equity line of credit are both second mortgage liens. You can either have it fixed where your payments of course are fixed OR....the line of credit where its interest only, interest rate is usually lower than the fixed. The nice thing about the equity line of credit, you can take the money out when needed whether than all at once with the fixed loan. Not all lenders offer the loans because when the value of homes were declining not everyone had the equity in their homes. You would be better to check your local bank to see if they offer them.Any questions, I'll be more than happy to help..Regards, Susan 650-352-5656 Ledingham Mortgage

Nov 12th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,788 contributions

I would always recommend the HELOC.. with a HELOC, you apply one time, and you have unlimited access to the funds for the first 10 years, and you don't have to re apply each time you need money, and if you have a major increase in value, you can always call your HELOC lender and ask them to reassess your credit line.. if they determine your value has increased, they could increase your line of credit. Also, the costs for a HELOC are typically less than $500.. not the same with a 2nd loan... On a 2nd, you apply one time and get a one time lump sum, whether you need that much or not.. and the rates are typically 1% to 2% higher than the first. To find out what's best for you, you should contact a local bank and let them put together a comparison.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Nov 12th 2015
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