Escalating factors completely out of our control indicate many of us to shop for a fixed rate home equity loan. These include our employment, global money markets, our health care expenses, and costs associated with education can, and many times do, dictate our need for larger sums of cash!
These ‘chunks of cash’ come from collateralized loans that various lenders issue for usually fair annualized percentage rates associated. While not as steep as outrageous credit card rates, they do cost you money and need to be analyzed at least a little before delving into this sort of loan.
That said, is the fixed rate home equity loan your best option? Well, despite what many think, you may have to pay more for interest on this type of equity loan as opposed to a mere equity line of credit. With this style, you will usually achieve a lower rate but you may have to pay more for fees like closing or even points.
The fixed rate equity loan or also known as the second mortgage, is your best pick if you need a fixed amount of money (usually larger amounts) over a period of fifteen to thirty years! While, this option is vastly more popular than many other loan types, you won’t have the upside of a revolving line of credit attached.
This credit line allows you much more flexibility to pull cash and then quickly payback for whatever amount you choose. At the end of any given ‘analyzing session’, it truly depends solely upon your current needs because both can be extremely helpful.
Take serious consideration of your current scenario and attempt to make an informative decision based on your most logical needs. Keeping this in mind will inevitably make your choice more certain, and ultimately make more sense!