The Difference Between a Home Equity Line of Credit and an Equity Loan
Homeownership provides a potential source of borrowing power, as once you build up home equity, you can tap it as a source of funds when you need money.
The equity – the difference between your home’s fair market value and the balance on your mortgage – can offer some of the lowest-cost lending available, through either a home equity loan or a Home Equity Line of Credit (HELOC).
Home equity loans:
Simply put, it is a second mortgage that allows you to access real estate equity in one lump sum. After the loan closing, the lender either cuts a cheque for a lump sum or wires the funds to the borrower.
If you own a home worth $300,000 with a $200,000 balance on your…
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