Home Equity Line of Credit (HELOC) A HELOC is
a revolving line of credit secured by the equity in your home. HELOC's
can be used and repaid over and over without the need for re-approval.
Interest will only accrue if you have a balance. Low minimum monthly
payments are often interest only and virtually all HELOC's are
adjustable rate loans and use the Prime Rate as their index.
Second Mortgage Loan
A second mortgage loan is recorded after your first mortgage. This loan
is also secured by the equity of your home. Second mortgage loans must
be refinanced if you want to use more money. Interest will begin the day
you receive your loan proceeds. Most second mortgages are fixed rate
loans.
Hundreds of HELOC's
and Second mortgage loans are available through the ShopMyLoan.com
network.
HELOC'S
- VS - 2nd Mortgages The Pros and Cons
HELOC PROS
HELOC CONS
Interest is usually tax
deductible
Some
risk with adjustable rate loans
Borrow up
to 100% of homes value
Using
a portion of your homes equity
Ability to
use over and over
Some
discipline is necessary
Low minimum
monthly payment
Minimum
payment won't reduce balance
Only pay
interest if there's a balance
Have
available in advance for
opportunities
and emergencies
2nd Mortgage PROS
2nd Mortgage CONS
Interest is usually tax
deductible
Interest
starts on entire loan immediately
Borrow up to 125% of
homes value
Can only be used once
Fixed monthly payment
Using a portion of your
homes equity
No rate risk - Fixed
rate loan
Typically a fixed rate
is higher
Hundreds of HELOC's
and Second mortgage loans are available through the
ShopMyLoan.com network.
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