A home equity line of credit, simply defnied, is a revolving line of credit, or loan that is taken against the equity that you have built up in your home, and can be obtained from most mortgage companies and banks.  In most cases, with a home equity line of credit, you can borrow up to 95 - 100% of the value of your home, minus the amount that you still have to pay on your mortgage. A home equity line of credit is rapidly becoming popular as property values increase, and consumers find that it is a great way to handle their personal debt and other financial issues far more efficently.  If you are wondering if a home equity line of credit is right for you, here are some frequently asked questions regarding home equity lines of credit to help you further understand the great benefits of getting one.

How is a Home Equity Line of Credit Different From a Home Equity Loan?

There are three main differences between the line of credit and the home equity loan. First of all, there is a difference in the interest rates you will receive. A home equity line of credit usually has a variable interest rate, while the loan has a fixed (or sometimes variable) rate throughout the life of the loan. Secondly, in a home equity line of credit, you are able to access your money anytime you like, so long as you pay back what you’ve used, but with the loan, you get all the money at once, and repay it over an extended period of time. In other words, with the line of credit you can borrow, repay, borrow repay as much as you like. Last, the home equity loan usually has fixed payments so that you will know what your payment is every month, while the home equity line of credit can vary based on the interest rate and the amount you owe.

Will Interest on My Home Equity Loan or Line of Credit be Tax Deductible?

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