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Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit
Have you decided to refinance your home or apply for a home equity line of credit but worry about your credit rating? Even with poor credit it is possible to refinance your existing mortgage or obtain a home equity line of credit. New practices in...

Creative Home Equity Strategies For Retirement
The Baby-Boom generation is nearing retirement and it is clear that millions of aging Boomers are financially under prepared. Reasons are many - poor savings habits, rising medical costs, the demise of guaranteed corporate pensions, and the dreaded...

Home Equity Line Of Credit Or Second Mortgage Loan Online - Things To Do With Your Homes Equity
If you are wanting to get a home equity loan, rates are still low enough that you may want to make use of that equity in your home. Do you need some ideas on what you could do to multiply your equity or make some extra money off of the capital that...

Lowest Interest Rate Mortgage Refinance Loans – 3 Ways To Get A Low Rate Refinance
The lower your interest rate on your refinance mortgage, the more money you will save. But not all refinance loans are created equal. To get the lowest interest rates, follow these three tips when applying for you refinancing. 1. Refinance Your...

Self Employed Loans - When Being Self Employed Is The Impediment
Being self employed has always been associated with challenges. Is finding a loan for self employed one of them? Is it? Well with loans for self employed suffer more from lack of information rather than lack of choices. Self employed people often...

 
HELOCs and Second Mortgages: Which One Should I Choose?

Whether you need some extra cash to pay off some credit card debts, or to make some home improvements, home equity lines of credit or second mortgages can be great ways to get started.

Many people looking to borrow money often opt for home equity line of credit, or HELOCs, for short. They are a tempting first choice, because they can often give you the much needed cash at a low interest rate. Another advantage to taking out an HELOC, or a home equity line of credit, is that they may provide the borrower with a certain tax break, but you would need to verify this with your lender or accountant.

One drawback to HELOCs, however, is the fact that borrowers are expected to put their homes up as collateral. So, it is important that you think this decision through, before finalizing the loan, because you may be at risk of losing your home- and its equity- if you are late or cannot make your monthly payments. Finally, if you decide to sell your home, must HELOCs will require that you pay off the balance, before completing the sale.

You can also take out a second mortgage, if you need some cash. Like the HELOC, second mortgages usually pay out the loan in one sum, which makes it a convenient option. Second mortgages also have the added advantage of having set payments, at a fixed interest rate. Many companies will charge a lending fee, which will vary from company to company. These fees are usually based upon a percentage of the loan and are frequently referred to as 'points.' If one fee seems too high, don't be afraid to shop around to find one which is better suited to your budget.

Remember, however, that adding a second mortgage to your home carries with it certain risks. Like with home equity lines of credit, you could lose your home, if you fall behind in the payments.
Mark Lambie is the founder of The Loan House a website that allows consumers to quickly and easily get online mortgage quotes and mortgage information.

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