Using your home’s value is a smart money move, but you have options for how to borrow that value. If you need a lump sum of money right away, a Home Equity Loan is the right way to borrow against your home. This method involves a fixed interest rate that is paid back in
equal monthly installments after you receive lump funds. If you need an “on-demand” source of money for various or unplanned needs, a Home Equity Line of Credit is a proper fit. Often called a HELOC, thisoption has a variable interest rate that can go up or down based on market conditions. However, both types of financing offer an affordableinterest rate that is lower than credit cards and allow you to use up to 85% of your home’s available value.
Which Home Equity is Right For Me? Globally Accessible. Locally Yours.
Comparison Table
Type
Home Equity Loan
Home Equity Line of Credit
What is it?
A fixed rate loan, like a mortgage, secured by the equity in your home.
A revolving line of credit secured by the equity in your home
How do I get funds?
One lump sum check
Withdraw funds as needed
Interest rates?
A fixed rate generally higher than a first mortgage but lower than credit cards or personal loans
A variable rate lower than a home equity loan but higher than a first mortgage
How much can I borrow?
80-85% of the available equity in your home
90% of the available equity in your home
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