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The main difference between a HOME EQUITY LINE OF CREDIT and a HOME EQUITY LOAN is how you actually receive your funds. With a home equity line of credit, you borrow the money as you need it (up to the pre-approved credit limit). With a home equity loan, you receive the entire loan amount upfront.
Home Equity Loans Available
Home Equity Line of Credit
Borrow money as you need it, up to the pre-approved credit limit. What you pay off in principal is added to your available credit line to use later.
Home Equity Loan
Receive the entire loan amount right away as a lump sum.
Interest Rates Available
Variable Interest Rate
Interest rate varies based on the nationally published prime interest rate as published in The Wall Street Journal plus a margin.
Fixed Interest Rate
Interest rate and monthly mortgage payments stay the same for the entire life of the loan.
Loan Payments
Variable Interest Payment
Variable interest payments variy monthly with the published prime rate and how much of your credit line you have used. Typically during the first 5 or 10 year draw period, you have the ability to pay interest only if you choose. After that, your principal and interest payment will vary to ensure your loan is paid off during the remaining years of the loan.
Fixed Interest Payment
Your principal and interest payments remain exactly the same over the term of the loan.
How Your Cash Is Received
Home Equity Line
You will receive a check book as well as a debit card which you simply use as needed. Any monies used will be pulled against your line of credit.
Home Equity Loan
You will receive the entire loan amount at once.
The Advantages
Variable Rate Advantages
Offers lower interest rates than other unsecured credit lines such as credit cards.
Fixed Rate Advantages
Different low payment options are available through a variety of terms.
