Chicago Illinois Home Mortgage Lender - Home Equity Lines & Loans

Home Equity Lines & Loans

There are two types of Home Equity programs; a Home Equity Line of Credit
(HELOC) and a Home Equity Loan.

Both require sufficient equity in your home and operate differently. A HELOC has
a variable interest rate and is tied to the prime rate, as prime moves up or
down, accordingly so does your repayment interest rate.
You only pay interest on the amount you draw against your Line of Credit. For
example, you may be approved for a higher credit line but if you only use a
portion of it the rest remains in place for future need.

A Line of Credit is repaid as an interest only payment so it is important to note
that your principal balance will not get bought down unless you pay more than
your required interest payment. Unlike the Home Equity Loan, where it is a
fixed interest rate and your repayment is a principal & interest payment, buying
down the principal balance with every payment you make. On this loan, total
funds are drawn at closing.

Using your home's equity to your advantage is a tax incentive for you since the
interest is tax deductible.
Please consult with your tax advisor prior to obtaining a Line or Loan since there
are limits for the tax deductions.

For current Interest Rates and to determine which option will be best for
your financial situation, contact Debra Sineni.

Home Equity