Are you planning a home remodel, do you want to install a pool or do you have college expenses to pay for? If so, a home equity loan or line of credit may be the right solution for you.
Put Your Home Equity to Use
- Remodel your kitchen
- Landscape your backyard
- Install a pool
- Complete home repairs
- Pay for a child’s education expenses
- Consolidate higher-interest rate loans
- Emergency or medical expenses
- Buy a car
What's the Difference?
It can be confusing to understand the difference between a home equity loan and a line of credit. A home equity loan is a one-time lump sum that is paid off over a set period of time with a fixed interest rate and fixed monthly payments.
A home equity line of credit is a revolving line of credit that allows you to borrow as little or as much as you want up to your credit limit during the time limit set by the lender. You only pay interest on your line of credit when you withdraw money. As you repay the principal, your credit revolves and you can use it again. A home equity line of credit gives you more flexibility than a fixed-rate home equity loan, allowing you to use it over and over again. Unlike a home equity loan which has a fixed interest rate, a line of credit has a variable interest rate which fluctuates over the life of the loan.
Which One is Right for You?
In general, you will want to choose a home equity loan if you know exactly how much you need to borrow in a set amount of time. If your money needs are staggered and variable, a line of credit will give you more flexibility to borrow only what you need when you need it. You can also ask yourself these questions:
- When do I need the money?
- For how long do I need the money?
- How long do I need to pay off the loan?
- How big of a monthly payment can I afford?
Ask Your Lender
Our experienced lenders will talk with you personally to assess your individual situation, answer all of your questions and help you make the best choice. When you meet with us, you may want to ask us:
- What is the term for the home equity loan?
- What is the life span for the line of credit?
- How much of a loan or line of credit do I qualify for?
- Can I renew my line of credit when it expires?
- What are the interest rates for both products?
- Do I have to use my line of credit right away? (Is there a minimum withdrawal upon closing?)
- Are there any circumstances under which the bank can freeze, reduce or demand full payment of my loan?
- If my house is on the market, can I still apply?
the cost of a home equity loan or line of credit.
Contact a lender
to learn more.