Equity Loans or Equity Lines of Credit?
Isn’t it nice to think that if you are ever in debt
or need some extra cash for your child’s college tuition
or that random house project that comes along, you have a
way to come up with the money? I mean, think about it. Let’s
say you have no room in your budget for paying a penny more
You already have a mortgage and other bills to pay. Your
income will not allow for any more spending. But you need
more money. Well, home equity loans are used like credit but
you can get the money immediately or in increments. The best
part of home equity loans? Home equity loans and lines of
credit are both often tax deductible.
Home equity is basically the amount of your house your own.
In other words, it is the amount of your house you have already
paid off (with down payment and/or mortgage). You can get
a home equity loan or line of credit for this amount, and
you simply pay it back with interest for as long as you need.
What’s the difference? The difference between home
equity loans and home equity lines of credit is that you can
get loans in cash, for the full amount, upfront. With lines
of credit, they work similar to a credit card, where you can
take money out when and if needed.
People use home equity loans and lines of credit for many
different things. The purpose and reasoning behind purchasing
the loan usually dictates whether you get a loan or a line
of credit. If you are in need of immediate cash in a large
amount for a one time payment or an upfront payment, you will
most likely be best of getting a loan. However, if you want
to have that money as an option and support but you do not
need it all at once and you may not want to use it all then,
perhaps, you should consider a line of credit.
Common reasons to use home equity loans and lines of credit
are to reduce monthly payments, reduce the tax burden, get
better terms on a home purchase or refinance loan, have cash
for emergencies or unexpected (large) purchases, and last
minute costs that turn out to be for more than you bargained.
Countrywide Home Loans specialists are there to explore your
Home Equity with you, explain how it works and what options
you may have for opening a home equity loan or line of credit.
Then, if you are ready, Countrywide can take you through the
Home Equity Loan application process and explain it step by