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Is Home Equity Credit Line Right for You

September 4th, 2013 by in General with 271 Views

Many people are using credit line to borrow against the equity in their homes. It has become a popular source of consumer credit. Lenders are offering home equity credit lines in variety of ways. Most loans tend to come with variable interest rates, while others come with attractive low introductory rates, but a few come with fixed rates. Most loans also come with large one-time upfront fees, others have closing costs, while others have continuing costs, such as annual fees. The list goes on; you may find loans with large balloon payments at the end of the loan, while others with no balloons but higher monthly payments.

Thus, no single loan will suit every homeowner. The best way to go about it is to contact different lenders, compare options, and pick the home equity credit line that best fits your needs. Ensure you review the home equity contract in detail before you sign it, and don’t hesitate to ask questions about things like terms and conditions of your financing.

Will home equity credit line suit you?

Home equity credit lines may be a useful source of credit for those who need to borrow money as they provide large amounts of cash at relatively low interest rates and may come with certain tax advantages as well not found in other kinds of loans. On the other hand, home equity loans require you to use your home as collateral for the loan. This means you will be putting your home at risk if you fail to pay on time or fail to complete your monthly payments on time. Be careful with those loans that have a large final payment as it may lead you to borrow again to pay off its debt or put your home in jeopardy in case you don’t qualify for refinancing. Since home equity loans provide relatively easy access to cash, you may find you borrow more money freely, which is not wise….

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  • MD Golam Rabbani

    The real next best thing is not to take any loan. It has an attraction to get more more which might let people through in the darkness of debt. Now a day Banks & Financial institution are offering loans with nice skim and people melted like a candle with those attractive offers. To be straight one should only take loan if he/she really really needs.

  • Sakil Hossen

    To develop my home from duplex to a five apartment type building I’m planning to loan credit. And through reading this post quite educative knowledge I’ve gained!! Thanks for a very handy contribution.