Originally Posted by
babycute
Hi I am Thomas, Can anyone explain about home equity credit line in detail, please reply along with brief note about home equity credit loan. plzzz!
I also have some thing to exchange!
In its simplest definition, home equity loan means using your house equity as collateral in order to borrow money. Collateral means your house will act as a guarantee. In the case if you cannot pay the loan or defaulted too long on payment, the lender has the right to sell the house to get back the loan.
The word equity simply means how much the house is worth minus the mortgage you currently owe.
A home equity line of credit allows you to borrow a fixed amount of money for the life of the loan. You do not need to take a lump sum loan at once since you can withdraw any amount of the loan when you need it. In a sense, it works like a credit card.
The interest rate for a home equity line of credit is variable and will rise and fall during the loan period. Payment per month depends on the total sum loaned, the interest rate and whether your credit is in the payment or draw period. During equity draw period, you can decide whether to pay the principal loan amount or the minimum payments to cover the interest.
hope this help
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