Home equity loans and lines-of-credit June 26, 2019
If you’ve been paying on a mortgage for an extended period and your home is worth more than what you still owe on it, you have equity in your home. And you could be putting that money to work for you – to make major purchases, to pay for home remodeling projects or repairs, to cover emergencies, or to pay off higher-rate debt.
Qualified borrowers who find themselves in need of extra cash may opt to take out either a home equity loan or a home equity line-of-credit (HELOC). But how do the two differ?
A home equity loan is borrowed as a lump sum and then paid back over a specified term. Shorter-term home equity loans tend to carry a lower rate than those with a longer term.
A home equity line-of-credit is available for a specified amount of time. Someone with a HELOC might borrow against that line of credit multiple times during the draw period as expenses arise, or they might not end up using it at all.
If you’re looking to tap into your home’s equity, DCECU offers a Single Advance Home Equity Loan and a Prime Home Equity Line-of-Credit.