Lower Interest Option
For some people, home equity can offer a lower interest rate than other types of loans. This can be helpful when considering education costs, large purchases, or managing debt. Check current interest rates.
There are two options when tapping into the equity that's been built up – a home equity loan or a home equity line of credit (HELOC). A home equity line of credit is structured for extra flexibility. Instead of receiving a lump sum, there is an amount of cash available to the borrower to take when needed.
So, if an unexpected expense arises, you could take the amount to cover the expense and leave the rest. This gives you the flexibility to use the line of credit in a way that suits your specific needs.
Several Potential Uses
Home equity loans can be used in a variety of ways. That means home equity loans and lines of credit can be an option for people in many situations. It's always good to know you have options. If you want to know more, you can read about the top uses for home equity loans.