Understanding the difference between a HELOC and Home Equity Loan
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One of the biggest advantages of owning your own home is the equity that you build in it.
Equity is the vault of value your home has and is the difference between the market value of your house and the amount you owe. A home’s equity is one of your largest assets, but it’s important to know what your options are if you need to access that value.
Whether you are looking to make home improvements, pay off debt, or take a trip, make the most out of your home’s value.
How you get your money.
A Home Equity Line of Credit (HELOC) allows you to take out a loan using your home’s equity and lets you withdraw what you need, when you need it. It’s kind of like a credit card; you can choose when and how often you borrow from it. As you re-pay your line of credit, you can borrow from the already approved amount for other things that may come up. A Home Equity Loan is commonly referred to as a second mortgage and is paid to you in one lump sum.
HELOC rates are variable, meaning they can fluctuate slightly based on market conditions. Numerica works with members and offers a stress-free feature, which allows you to bundle the loan into a fixed rate if desired. A Home Equity Loan offers a fixed rate that stays the same from year to year.
Time to payback.
Because a HELOC can continue to be borrowed from, the payback options are flexible. Home Equity Loans are typically for a span of five to seven years.
Interested in talking to one of our Numerica employees? Our Numerica team is ready to help. Find the branch closest to you.