Home Equity Line of Credit Pro and Cons
Home equity line of credit pro and cons are important if you decide to tap your equity in your home. Whether you are choosing a home equity loan vs equity line of credit, each loan is considered a second loan and is secured by your home.
Here are some home equity line of credit pro and cons to make your choice a little easier.
Pros:
Most home equity lines of credit have little or no closing costs.
You only need to make interest only mortgage loan payments which means lower monthly mortgage payments than with a fixed interest rate loan.
Variable mortgage interest rates are usually much lower starting rates than with fixed interest rate loans.
You can use the loan to draw on only as you need the money. You only pay interest on the money used not on the entire loan amount.
You can use the remaining unused balance of the equity line as an emergency fund.
Cons:
Variable mortgage interest rates are not stable and could go higher than a fixed interest rate loan.
Monthly mortgage payments are not level and can fluctuate a great deal.
Most home equity lines of credit have yearly fees paid to the lender.
With equity rates rising quickly it's easy to spend your all of your home equity.
It makes sense to use the equity in your home to pay down debt, or pay credit cards off. But use the money wisely and only use as little equity as you have to.
Hopefully these home equity line of credit pro and cons will make your choice of equity loans easier for you.
Copyright © 2005 Credit Repair Facts.com All Rights Reserved.
About the Author
This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative articles that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/articles_1.html
Credit virus Debt
Secured And Unsecured Debt. What's The Difference? It’s easy to just think that debt is just debt, but in reality, there are different types of loans, and it’s important to know what which type you have. You will need to understand the differences in order to be a good money manager, or, if...
Faxless payday loans
After months of patiently waiting for gas prices to subside, prices have hit an all time high and harding working Americans are feeling the pinch. More and more Americans are using payday loans as a means to meeting month end financial obligations such as rent, car notes, utilties, etc. ...
Rebuilding Better Credit
Today, good credit is the one constant necessity needed to succeed in any endeavor, from starting a new business venture to purchasing a home. Without having established prior good credit and maintaining this status, re-establishing decent credit can be a very difficult task. The need for credit...