Considering Line of Credit Loans as your Mortgage Option
You’ve done research, performed mortgage comparison and chose the best home loan for your circumstance. But then at some point in time, you become part of a group of home owners who wish to secure another loan without having to offer any collateral. Chances are you will get turned down by most lenders. Here are your options: first, you can either wait it out until you gain full ownership of the house. However, there are situations when such resolve is not acceptable. Take for example the case of emergency situations that require immediate access to funds.
The second option is Line of Credit loans. Before we go on to tackle the basics of a Line of Credit Loan, let us first talk about the definition of equity. What exactly is equity? Equity refers to the difference between the property owner’s mortgage and the property’s actual market value. Let’s take for example a $400,000 property. If the outstanding mortgage balance is $250,000, then the amount of the property’s equity is $150,000.
Using the stored Equity in your Home
Now that you know what equity is, it is time to discuss Home Equity Line of Credit. This type of loan is similar to having an unlimited loan account. When you secure this type of loan, you get to borrow money from it and repay the amount you took from the line of credit once the money is available. The advantage of having this type of loan is that you get the same interest rate as your original loan. Your property’s equity serves as your life line, your source of cash from which you are able to withdraw funds for your needs.
Advantages of Equity Line of Credit Loans
Just like any other type of home loan, this type of loan can be quite useful as a financial tool when used responsibly and correctly. Try to perform a mortgage comparison to see for how the benefits of this type of loan matches against other loan types in the market. Here are some of the notable benefits of having a Line of Credit Loan:
- This loan type allows you to gain access the stored equity in your property and pay low interest rates. The interest rates would be the same as the interest rate of your original mortgage, which of course you acquired after performing a mortgage comparison.
- If you need to access fund for the purpose of investing, the cost of the interest for Line of Credit Loans will be tax deductible.
- Instead of getting a car loan, personal loan, boat loan and other unsecured loans, you can use Line of Credit loans to enjoy low interest rates. You can even draw funds from your line of credit and use it as deposit for the real-estate purchases.
Published by Stevemartin on December 1st 2011 | Loans
Published by Ponting Sarad on July 3rd 2012 | Loans
Published by Thomas Symends on June 19th 2012 | Loans
Published by Michelsmith on April 3rd 2012 | Loans
Published by Karen Rase on June 1st 2012 | Loans
Published by Abnir Bond on June 21st 2012 | Loans
Published by Abell Bush on May 26th 2012 | Loans
Published by Merchant Cash on July 10th 2012 | Loans
Published by Freedy Cort on January 5th 2012 | Loans
Published by Riyt Leson on June 9th 2012 | Loans
Published by Micles Jonson on July 20th 2012 | Loans
Published by Teresajeane on June 1st 2012 | Finance
Published by Aldis Roy on May 26th 2012 | Loans
Published by Ian Foster on January 25th 2012 | Finance
Published by Morgan Sadyu on July 14th 2012 | Loans
Published by Kelin Smith on July 9th 2012 | Loans
Published by Aldenn James on May 14th 2012 | Loans
Published by Norwick Kerry on June 27th 2012 | Loans
Published by Deniz Jared on June 6th 2012 | Loans
Published by Abnir Bond on May 15th 2012 | Loans