Home improvement loan with a home equity line of credit

February 21, 2008 | In Loan, Mortgage |

 You can get a home improvement loan in the form of a home equity line of credit or a home equity loan. The difference between the two is simply that a home equity line of credit is similar to using a credit card and a home equity loan is just that a loan. Loan meaning that you have a certain amount of time to pay back the money borrowed to the financial institute.With either a loan or line of credit you have money available to make home improvements.

A line of credit will give you a series of checks you can write up to the amount of your line of credit limit. That line of credit is always there. You have to pay monthly payments, but the money you pay back is available for use again.

With a home equity loan you will get a flat amount of money that you are able to use. You have to make a set amount payment monthly and that money is not available to use again. The loan will be payed completely off one day with no more money available to you for home improvements.

Home improvement loan with a second mortgage

You can also get a second mortgage or mortgage refinancing, as some call it, to get money for you to be able to make home improvements. This kind of loan is only available if you already have a first mortgage and you have built up equity into your home. Building up equity into your home allows you to be able to get money back on the amount your home may be appraised for.

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