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What is the difference between a Home Equity Loan and a Home Equity line of credit?

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BigB
C & J are 10!

Member since 6/05

5913 total posts

Name:
Stacey

What is the difference between a Home Equity Loan and a Home Equity line of credit?

I am so confused!!!

Posted 4/27/07 12:31 PM
 
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GoldenRod
10 years on LIF!

Member since 11/06

26791 total posts

Name:
Shawn

Re: What is the difference between a Home Equity Loan and a Home Equity line of credit?

http://en.wikipedia.org/wiki/HELOC
http://www.quickenloans.com/home_equity_loan/articles/facts_home_equity_line_credit.html
http://www.lendingtree.com/smartborrower/Using-your-home-equity/Home-equity-loan-vs-line-of-credit.aspx


What’s the difference?
A HELOC is a form of revolving credit similar to a credit card. It allows you to draw funds, up to a predetermined limit, whenever you need money. There is generally a minimum payment due each month, with the option to pay off as much of the line as you want. With a HEL, you receive a lump sum of money and have a fixed monthly payment that you pay off over a predetermined time period. In each case, the amount you can borrow is based on factors such as your income, debts, the value of your home, how much you still owe on your mortgage and your credit history.

Posted 4/27/07 12:43 PM
 

MegZee
My bunny

Member since 5/06

8777 total posts

Name:
Meaghan

Re: What is the difference between a Home Equity Loan and a Home Equity line of credit?

a HELOC is revolving, like a CC.

if YOU have a $100K heloc, and borrow $50K, you have $50K left in availability. if you payback that $50K you first borrowed, you have $100K again. and you are only required to pay interest only. these are usually variable interest, like a cc.

a HE Loan is like a car loan. they give you a $100K loan, you pay back monthly prinicpal and interest until its paid off. these are usually fixed rates.

Posted 4/27/07 5:49 PM
 
 

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