HELOC FAQs
Home Equity Lines, Home Equity Loans, Second Mortgage
HOME EQUITY
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How do I determine which type
of secondary home equity financing is best for me?
A reasonable guide for making this decision is
to evaluate your intended use for the funds. If you have a pre-determined
expense that will require a lump sum or fixed payment (i.e. major home
improvements for which you have a written estimate) then you may prefer a
traditional second mortgage with rate and term that are fixed for the life of
the loan. Conversely, if you have a stream of undetermined expenses (i.e. misc.
home improvements, misc. consumer purchases) then you may prefer the check
writing convenience of a home equity line. With a home equity line of credit,
you pay interest only on the funds you use or need, therefore with unforeseen
expenses this may be the most cost-effective approach.
