Monday, January 29, 2007

Home Equity Loans

We're finding at work that a lot of people are coming in lately to apply for a Home Equity Line of Credit or a Home Equity Loan. These are great financial tools that can be utilized by a home owner to pay off other higher interest debt they may have, or for funding renovations they may want to do in their home.

My personal opinion is that it is better to go for a Home Equity Line of Credit, rather than a
Home Equity Loan. Reason being, you apply for a set amount for both, based on how much equity you've got built up in your home. And although the interest charges for both of these financial tools is much lower, compared to credit cards etc., you only pay interest on the portion of the credit line you have used, unlike the loan, where you are paying interest on the full amount. Plus, it's nice to have that security of the credit line available to you, should an emergency arise, rather than having to use your credit card(s).


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