If you own a home, there’s a good chance you have some equity in that real estate. Before you tap into those funds, get to know the differences between a Home Equity Line of Credit (HELOC) and a Home Equity Loan.
What is a HELOC?
A HELOC acts like your own personal credit card with a variable rate. Qualify, and you’ll get a line of credit that’s available whenever you need it. Best of all, you can use it repeatedly during the predefined draw period (up to 15 years). While you won’t pay interest until you use the money, the InRoads HELOC includes a minimum monthly payment of $50 or 1% of the amount advanced.
A HELOC is ideal for anyone wanting to tap into their home’s equity. In some ways, it’s a very inexpensive emergency fund to cover medical bills and car repairs. It’s also a great way to pay for home remodels, college expenses (including tuition), and a lot more.
What is a Home Equity Loan?
A Home Equity Loan gives you a lump sum of money to spend as you wish. Then you just make monthly payments until it’s paid back. The rates are fixed, which locks in those monthly payments.
A home equity loan is great for larger expenses, such as a large home remodel, the down payment on another property, or debt consolidation.
Start your home equity adventure by learning more at inroadscu.org/chooseyourupdate.