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Equity is the value of your home minus the remaining mortgage balance which is outstanding. Home equity loans come in two varieties - fixed-rate loans and lines of credit - and both types are available with terms that generally range from five to 15 years.
The appeal of home equity borrowing resides in the low interest rates, the tax deductibility of interest and the growing equity a homeowner builds over time.
Before deciding whether to head down this road, you should carefully weigh the costs against the benefits. Shop for the credit terms that best meet your borrowing needs without posing undue financial risk. And, remember, failure to repay could mean the loss of your home.
Using your finances wisely can give you great relief and freedom. Before taking on any financial obligations it is important to understand the risks as well as the benefits.
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