If you are lucky enough to have a home with some equity in it, you can look into home equity lending to pay for an assortment of items. There are two main types of equity lending the home equity loan and a HELOC (Home Equity Line of Credit). Both forms of equity lending have their pros and cons; let's take a look. Contact us to learn more.
A home equity loan is a loan given to you by the bank using part of the equity you currently have in your home. The equity is that amount of
the home's price that you own outright. Usually, a homeowner will need to hold about 20% of their home to qualify for this type of
loan.
These loans will have low interest rates compared to other loan types, like personal, car, or boat, because it uses your home as collateral
for the loan. This type of equity lending is great because they work for people with all types of credit profiles.
HELOC equity lending is a line of credit that uses your home as collateral and to compute the amount of credit that you can be allotted.
It's kind of like a low interest rate credit card that you can use against the equity you have in your home. A HELOC is excellent for
working on home improvement projects with no set price or multiple ongoing projects.
When deciding what type of equity lending is best for you, take a minute to think about your credit profile, what you will be using the loan for, what repayment will look like for you, and shop around for the best deals out there. BMC Mortgage & Investments can help you find the perfect loan, give us a call to find out more today.