Primarily there are two different forms of home equity mortgages or loans, a fixed-term loan and a line of credit often referred to as a HELOC.
A home equity loan is a one-time lump sum of money that slowly gets paid back monthly with a fixed interest rate, while a HELOC is more flexible and provides you funds as you need them and you would pay it back as you would a credit card that is they have a revolving limit that is you use it and pay it as much times as you can. When getting approved for a home equity loan, financial institutions will approve your request up to a specific amount based on the remaining equity of your home as your equity in your home will act as collateral.
Home equity loans can be one of 2 products:
Although interest rates on a home equity loan are higher than on a first mortgage they are typically much lower than on a credit card. Please contact us to learn more at 416-788-7632.