Do you know the difference between a Home Equity Loan and a Home Equity Line-of-Credit? We’re here to help you find the best fit for you!
Home Equity Lines-of-Credit
These act as revolving lines that allow you to borrow sums at your convenience up to the credit limit; similar to a credit card. The minimum monthly payment during the draw period is usually just the interest amount. Once the draw period has ended the loan enters the repayment period which can result in higher monthly payments for principal and interest or a lump sum due at the end.
Home Equity Loans
These allow you to borrower a specific amount which is given as a lump sum, one-time disbursement. The loan is structured with monthly payments over the course of the chosen term that includes both the principal and the interest; similar to a mortgage or vehicle loan.
Both are good options because they allow you to work on home improvements or fund other expenses. It just depends on if you want the total amount at once with a loan or would prefer to have the funds available as you need them.