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Want to tap into your home’s equity but aren’t sure whether a loan or line of credit is best for you? A home equity loan or a home equity line of credit (HELOC) allows you to utilize the equity you’ve accumulated over time for your own personal goals. LendingTree can help you choose the best option when taking out your home equity. By answering a few quick questions, you could be matched with up to 5 lenders to help you start tapping into your home’s equity.
Easy, right? Read more below about the difference between a home equity loan and a home equity line of credit (HELOC).
With home prices skyrocketing across the United States, now is the time to tap into your home’s equity for various reasons. If you’re looking for an opportunity to refinance any type of loan, now is probably not the ideal time, given that ongoing Fed rate hikes making refinancing more expensive. However, utilizing your home equity may help you accomplish the same goals as refinancing.
See below for additional information about how a home equity loan or HELOC could be beneficial for specific reasons:
Adding on a large addition or taking on a major renovation? A Home Equity Loan may be the best option for you if you’re planning on completing this project within a shorter period of time, but would like to pay off the expenses over time.
Completing smaller projects over a longer period of time? A Home Equity Line of Credit may be the best option for you, allowing you to keep the HELOC open as you complete different projects over a multi-year period. You’ll only pay interest as you take cash out, and you can pay back the money you take out over time.
Wanting a more flexible payment option? A Home Equity Line of Credit can help you make payments towards debt consolidation when you are able, providing more flexibility than a Home Equity Loan.
Wanting a lower interest rate or monthly payment? A home equity loan may be the right option for you, as interest rates are usually lower than credit card rates, and you may be able to make smaller monthly payments over a longer period of time.
Making annual or semesterly payments? With a home equity line of credit, you’ll have the flexibility to utilize your home’s equity whenever you need to make payments.
Paying off other higher education expenses? If you’re paying off remaining expenses for a master’s degree or other advanced degree, a home equity loan may be the best option in order to split these expenses into monthly payments.