Home equity loan vs Home equity line of credit
Typically a home equity loan can be obtained in a lump sum or used as a revolving home equity line of credit.
A home equity loan can be:
- A fixed rate mortgage
- An adjustable rate mortgage
Homeowners who require more money in large amounts usually apply for a home equity loan. There are a few expenses that make a home equity loan useful:
- Debt consolidation
- Home repairs
- Medical bills
- College tuition for family members
Tax benefits A home equity loan is also beneficial because the home equity loan rate charged is usually tax deductible, as the loan is used for its primary functions. You can use a home equity loan calculator to check what various home equity loan rates will mean for your monthly payments.