Mortgage / Equity

Equity
Home Equity
Mortgage
Home Line of Credit

Taking out a line of credit on your home is one of the best and cheapest methods of finance available to homeowners.

A home line of credit or home equity line of credit is an open ended agreement in which a lender gives a homeowner the right to borrow money against the equity in their home. Equity is the difference between the mortgage principal and the value of a home. If the home’s value exceeds the mortgage amount, the homeowner has equity.

A home line of credit gives the homeowner the right to use up to a specific amount of this credit which his secured by equity in the home at any time. The difference between a loan and a line of credit is that a homeowner can use the line of credit again in the future.

Advantages to a Home Line of Credit

One advantage to a home line of credit is that a homeowner can only use the amount of money that they need to use. This can help a homeowner limit the amount of interest they have to pay and the amount they have to pay back.

Since the interest on a home line of credit is usually lower than that on credit cards and other consumer credit the homeowner usually saves money by using one. A homeowner can save additional interest by using money from the home line of credit to pay off such high interest credit.
The homeowner can save even more because the home line of credit may be tax deductible.

A home line of credit gives a homeowner a source of emergency finance they can tap into at any time. This can be of immense value to a homeowner who has an older home which requires a lot of repairs.

How to Get a Home Line of Credit

The first place a homeowner should look for a home line of credit is their mortgage provider. Most mortgage providers will provide home lines of credit especially to mortgage holders who have a record of paying their mortgage on time.

By going online a homeowner should be able to locate a large number of lenders that make home lines of credit available. By using the calculator features at websites like bankrate.com a homeowner can compare does of home equity line of credit offers and locate the best one for them. The best home equity line of credit is usually the one with the lowest interest rate.

When you go online you should type in the words home equity line of credit to begin a search. Clicking on the words home equity line of credit at lender websites can help you find a line of credit.

The lender websites can tell you how much credit you can get and the amount of interest that you will pay on it. The amount of interest charged on a home line of credit is usually determined by your credit rating.

Using a Home Line of Credit

Taking out a home line of credit can give a homeowner a source of credit that they can use for a wide variety of purposes. A home line of credit is a versatile source of credit that can enable a homeowner to put their equity to work for them.