LendingTree.com Examines How to Use Home Equity Loans and Home Equity Lines of Credit Wisely
CHARLOTTE, N.C., March 5, 2008 – If you are grappling with whether or not you should get a home equity loan or line of credit, first consider the amount you need to borrow and what you need it for. Whether you need a one-time lump sum of money to pay for a home renovation, or an ongoing sum to pay for college costs, there is a financing method that will work to meet your needs. Let LendingTree.com walk you through some tips for both financial tools:
For one-time lump sums, a home equity loan (HEL) is the best way for you to borrow against the value of your house to pay for a one-time expense such as a renovation or buying a car. A HEL gives borrowers a lump sum of money, with a fixed monthly payment that is paid off over a specified period of time.
For ongoing cash needs, a home equity line of credit (HELOC) may be the better option for borrowers. A HELOC is a form of revolving credit similar to a credit card, but often times with a much lower interest rate. Borrowers are given a specific credit limit and they can then draw funds whenever they need money, and then pay at least a minimum monthly payment with the option to pay off as much as they’d like. The ability to withdraw any amount, as opposed to a predetermined monthly allowance, allows those with HELOCs to pay for expenses that aren’t necessarily planned out, such as medical bills or college costs.
Remember, when getting a HEL or a HELOC, either loan is collateralized based on the value of your home. What this means is if you default, your house is on the line as the loan is secured against your home. Interest rates for HELs and HELOCs are often lower than a credit card because of this so before you commit to either, please make sure you are able to repay the money you borrow. The last thing you want to do is put your home in jeopardy because you had difficulty paying your monthly HEL or HELOC bill.
About LendingTree, LLC
LendingTree, LLC is the nation’s number one online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 23 million loan requests and $185 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, credit cards and high-yield savings accounts via www.lendingtree.com and 800-555-TREE.
Launched in 1998 with headquarters in Charlotte, North Carolina, LendingTree, LLC also owns and operates LendingTree Loans sm, LendingTree Settlement Services, LLC, GetSmart®, and HomeLoanCenter.com. LendingTree, LLC is an operating company of IAC.