HOME EQUITY LOANS » HELOC

Every now and then people need access to money quickly to cover unexpected expenses. When the time comes it may be difficult deciding between using a line of credit from a credit card or securing a loan of some type to help get through the rough patch. Each option has both advantages and disadvantages associated with them based on what you need to use the money for and how you plan on paying back the debt in general.

If you have one large expense that requires immediate funding, then a traditional loan option may work best for you. With a traditional secure loan you can borrow money against some type of collateral, such as your home. You can choose a specific dollar amount to borrow and then pay back the debt in fixed, monthly payment amounts. This type of loan is a great way to finance the launch of your new business, consolidate all your other loans into one controlled monthly payment amount, or even cover large hospital bills. These type of loans require paperwork, patience and an approval process.

However, if you fancy yourself a bit more spontaneous and do not have a set plan for repaying the money you are planning on borrowing, then you may opt to use a line of credit from your credit card. By using your credit card you can easily access the money you want, when you want it and not have to go through a whole bunch of steps to get it. Using a line of credit is a quick and simple way to access your money, but it can be costly. Interest rates for credit cards are extremely high and thus your hasty purchase may end up costing you more than what you originally expected.

If you are a homeowner, credit cards are not the only type of line of credit you may have access to as you have the option of a home-equity loan. A home equity loan provides you with a line of credit that can be used kind of like a credit card. During the first five years, or the "draw" period, the more you payback the loan, the more credit you will be granted. When the draw period concludes you can choose to either pay back the money in one lump sum or in traditional fixed payments. All these terms will be determined in your contract.

Before opting between borrowing money via a line of credit or a loan, you need to evaluate your finances and your financial behavior - as far as how your repayment plan will be. By weighing both the pros and cons you will certainly come up with an excellent decision!

If you are a homeowner in need of some instant cash, you may be looking into different financial options and one of them is borrowing against your home equity using a home equity line of credit. Whether you're building an addition to your home or just paying down credit card debt, if you have equity in your home, you may be able to qualify for a home equity line of credit or take out a loan against your house. But which is the best option, a line of credit or a loan? This depends on your personal situation. Read on to see how each scenario can help you decide which option is best for you.

Loan Against Your House

If you apply for a loan against your home, you are basically applying for a second mortgage. With fixed rate second mortgage loan, you can borrow a set amount with fixed rate and make fixed payments every bill cycle, which could be anywhere from ten to thirty years; depending on whether you borrowed a short term or long term loan. The advantage of taking out a second mortgage allows you to know in advance how much you have to pay each month, which will help with budgeting. So having a loan may be a good option for you if you need a large amount of money all at once.

Line of Credit

A home equity line of credit, on the other hand, gives you flexibility and allows you to tap the equity in your house more than once, on an as-needed basis. For example, you might be approved for a $50,000 line of credit against your home equity. In that case, you would be able to borrow $1,000, $2,000 or $10,000 against your credit, writing a check for whatever amount you need. You only pay interest on the amount that you borrow, so if you don't borrow anything, you don't pay any interest. Ahome equity line of credit is typically structured to expire before your 30 year mortgage ends, so it may have a "draw" period, in which you can borrow at will (as well as a "payback" period, in which you must make payments against the line of credit). You may also have restrictions on how much you can withdraw. Your contract should spell out clearly what the restrictions are on your line of credit, and explaining any circumstances under which the entire outstanding balance would become due at once.

A home equity loan is a loan using a borrower's house as collateral. If you're a homeowner who is thinking about making major improvements to your home, or have some sort of a big-ticket item in front of you that you need help paying for, a home equity loan could be the right way to go to get...

Anyone who is looking for a home, or currently owns one, should be familiar with the pros and cons of a home equity line of credit , commonly referred to as a HELOC .

A home equity line of credit is a loan where you, the borrower, offer the equity in your home as collateral to the lender. When...

There are significant risks associated with home equity lines of credit, which are commonly referred to as HELOCs. Many people have been unpleasantly surprised by their experiences, and still others are encountering problems using their HELOCs now that the economy is in trouble. If you're...

When comparing the Annual Percentage Rate (APR) of a Home Equity Line of Credit (HELOC) and a standard loan, it is important to remember that they are essentially two different things. When it comes to a home equity line of credit , the APR will be the prime rate (or whichever major interest rate...

Many people make mistakes when applying for a home equity line of credit (HELOC) . The good news is that, as with just about everything in life, being forewarned is forearmed. Read on for some valuable tips on what not to do when applying for a HELOC.

One common mistake people make when applying...

The average homeowner will want to take a close look at what a HELOC can do for them. There are significant advantages to getting a home equity line of credit , as opposed to a traditional home equity loan , and the choice needs to be made carefully and thoroughly. You may find that a HELOC is...

If you're a homeowner and you're trying to choose between a traditional home equity loan and a HELOC (home equity line of credit) , then you need to be aware of their differences and similarities. They've got their pros and cons, of course, and these details could make a major difference in your...

Banks all over America are in the business of offering home equity lines of credit , more commonly known as HELOC . They've been used by millions of American home owners to get to the kind of credit line they need.

Some of the biggest names in the HELOC game are:

• Wells Fargo Home Mortgage
• ...