If you own a home, you can borrow against the equity of the home with either a loan or a line of credit. The equity in your home is the difference between what your home could sell for and what you owe on the mortgage.
With a home equity loan, the lender advances you the total loan amount upfront, while a home equity line of credit provides a source of funds that you can draw on as needed. A few other differences are shown in the chart below.
If you’re considering a loan, give us a call or stop in to discuss your options. We’ll help you find the right type of lending for your specific needs.
|LOAN||LINE OF CREDIT|
|Payments||A fixed payment amount will be required through a specific period of time.||Payments are more flexible than a loan. You can make the minimum payment, pay the full balance or pay an amount in between.|
|Interest||Interest will be charged as soon as you receive the funds.||Interest will not be charged until you make a purchase or take out cash against the credit line, and you’ll only be charged interest on the outstanding balance you carry.|