Home Equity Loan Rates - Home Equity Line of Credit Rates

A home equity loan allows you to borrow money against the equity in your home. This loan is a way of cashing out the funds you have invested in your home without selling or refinancing it. In general, equity loans are not more than the current market value of your home however, some lenders can go up to 125% of the home value with higher fees and points.

It is a secure debt and your loan is secured by your property, if you fail to pay back the lender can sell your home to collect the debt. There are two forms of equity loans, one is called "Home Equity Loan" and other is "Home Equity Line Of Credit"

Home equity loan
A home equity loan is when you get a lump sum amount but you can not withdraw more money.

Home Equity Line Of Credit
They are also called HELOC when you open a home equity line of credit you have a revolving credit line very much like a credit card you can withdraw money and pay it back, if you have $20,000 HELOC and you paid $10,000 then you can again borrow up to your line of credit with out re-applying and going through the process.

Home equity loan and line of credit have the same advantages, it all depends on what you want to do with the money. Home equity loans are better if you want to pay off credit cards and other debts to reduce your monthly payment. If you want to do home repairs or use it for business then line of credit makes more sense. Both line types are tax deductible if money is borrowed against primary residence (check your local laws). The loan rates are little higher than first mortgage rates depending on your credit history and how much money you need.

Rate Types available for home equity loans.
Fixed rate mortgage
Adjustable rate mortgage
15 Years Mortgage
20 Years Mortgage
25 Years Mortgage

There are no specific laws to restrict the use of home line of equity but lenders do ask the reason, here are some useful things you can do with home equity loan and home equity line of credit.

Debt consolidation
Home repairs
Bills
Business Purpose
Personal Use
Anything

Home equity loans and lines of credit are paid back in a shorter period than first mortgages. Mortgages are commonly set up to be repaid in 30 years equity loans and lines of credit are often repaid in 15, 20 or 25 years they can be as short as five years. Just like traditional mortgages, a broker can help you getting loan.