Home equity loan vs. line of credit

Chanhassen, MN. Bathroom Remodeling.

This debt management article explains the two types of home equity loans: term or closed-end loans, and lines of credit. Both types are called second mortgages because they are based on the property you own like your regular mortgage; however, in one you have access to an amount all at once and the other is more like a credit card. The article explains what each is like, which one you might want to consider, and the questions to ask yourself and your lender to decide.

“Home equity loans and lines of credit are usually for a shorter term than first mortgages. The most common type of mortgages runs 30 years, while equity loans typically have a life of five to 15 years.”

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 Chanhassen, MN. Bathroom Remodeling.