Q: With refinancing rates so low right now, we want to take out a second mortgage. Is it better for us to take out a home loan or line of credit?
A: Home equity loans and home equity lines of credit, also known as a HELOC, are both sometimes referred to as second mortgages, because they are secured by your property, just like the original, or primary, mortgage. Which one you should consider depends on your needs.
When you open a home equity line of credit, you’ll only pay for the amount of money you use, as opposed to a home loan, which provides with a specified amount of money that you’ll need to pay back gradually. A HELOC is usually a good deal for those who want a lower up-front rate and access to money at unpredictable times, while home equity loans work better for those who need a certain amount of money and payment stability
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