Home ownership comes with many perks and building equity is one of them. But is the equity in your home working for you? Is it time for home improvements? How about college tuition, medical bills or a new car? A home equity line of credit, or HELOC could be the answer.
A home equity line of credit is a loan where the borrower’s equity in his or her house is used as collateral. A HELOC is similar to a checking account in that the funds are not advanced to the borrower, but instead borrowed from the account during a draw period. Typically these lines of credit have a minimum monthly payment with interest and the interest rate on a HELOC usually varies.
The best way to obtain a HELOC is to compare rates and terms of local banking institutions or credit unions. ERATE.com’s Home Equity rate tables can be helpful in finding the lender who can assist with making the equity in your home work for you.
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