If you have big dreams, need some help with financing them, and are looking for a suitable means, home equity is a good way to go about it. Whether you have to finance your son’s or daughter’s college education goals, or need to have finances for any other big project, you might consider home equity as an option. What is home equity all about? In what circumstances is it a useful option. Here is some information on some basic kinds of home equity:
Line of credit: This is becoming a great option for people who want the freedom of being able to borrow money anytime, and of any amount. If you have a home equity line of credit, you can enjoy great flexibility with your loan. The credit company decides what is the actual credit limit you enjoy. The criteria on which it makes this decision are your credit history, your previous loans, financial condition including your debts and income. After a thorough examination of all these factors, the credit company approves a variable line of credit amount. In terms of freedom to borrow, a home equity line of credit is a suitable option.
Home equity loan: In this loan, you put up your house as collateral and get to borrow a single-time lump sum amount. The credit company offers a fixed rate and sets a term within which you need to repay the loan. If you fail to repay the loan within that time period, your house gets forfeited. Since most people would not risk their house unless they were very sure of being able to keep it, credit companies usually are flexible regarding a home equity loan. If you are quite sure that you can repay the loan in time, a home equity loan might work for you.
The chief difference between a home equity line of credit (HELOC) and a home equity loan is this: With HELOC you enjoy a flexible interest rate and it involves revolving credit. This means that you can pay back the amount of the loan in any number of installments. With a home equity loan, the interest rate and repayment term are usually both fixed.
Weigh the advantages and disadvantages of both these options before you decide on any one. A good credit company helps you decide which is the best option according to the state of your finances and your requirement.
If you are interested in home equity, Melbourne offers many options.
If you would are considering the option of home equity, Melbourne residents recommend www.vwestcu.org