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What`s the difference - Home Equity Loan or Line of Credit?
A home equity loan is a fixed rate, fully amortized second mortgage, with fixed monthly payments throughout the term of the loan.
A home equity line of credit is a revolving credit account secured by the equity in your home. It has a variable interest rate, based on the prime rate as published in the Wall Street Journal. There is a draw period of usually 10 to 15 years. During the draw period, you have the option of making interest only payments, or fully amortized payments. At the end of the draw period, the loan converts to a fully amortized term for the remainder of the balance.
What Is The Credit Limit?
There is a minimum loan amount with a Line of Credit. Based on your available equity, you can receive a loan amount up to as much as $250,000. Home equity lines of credit are available up to 100% of your property value.
What Type of Property?
These loans are available for owner occupied single family homes, condominiums and townhouses. Ineligible property types include mobile homes, agricultural properties, co-ops, time-shares, and rentals.
Can I Deduct The Interest I Pay?
Because the loan is secured by your primary home, the interest may be tax deductible up to 100% of home value. Consult with your tax advisor.
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