Conventional Home Equity Loans

Home Equity Credit Line

A home equity line is a form of revolving credit in which
your home serves as collateral. Because the home is likely to
be a consumer’s largest asset, many homeowners use their
credit lines only for major items such as education, home
improvements, or medical bills and not for day-to-day
expenses.

With a home equity line, you will be approved for a specific
amount of credit — your credit limit — meaning the
maximum amount you can borrow at any one time while
you have the plan.

Typically, you will be able to draw on your line
by using special checks.

Home Equity Loan

If you are thinking about a home equity line of credit you
also might want to consider a more traditional second
mortgage loan. A second mortgage loan provides you with a
fixed amount of money repayable over a fixed period.
Usually the payment schedule calls for equal payments that
will pay off the entire loan within the loan period.