CTeBockhorst's Blog

The Mortgage and Real Estate Scoop

  • Home
  • About
  • Blog
  • Resources
    • Calculators
    • Download My eGuide Today!
    • First Time Buyer Tips
    • First Time Seller Tips
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Home Appraisal
    • Home Inspection
    • What to Expect at a Loan Closing: A Step-by-Step Guide
  • Disclosure
  • Apply
  • Reviews
    • Read My Reviews
    • Zillow Reviews
    • Leave a Review
  • Contact

A Home Equity Loan Versus A HELOC

April 7, 2023 by Coleen TeBockhorst

A Home Equity Loan VS HELOCIf you are looking for a quick source of cash, you may have been told that you can tap into the equity in your home. If you have at least 20 percent equity in your home, you can borrow against that equity at a relatively low interest rate for a quick source of funding. You might be deciding whether to apply for a home equity loan or a home equity line of credit, which is usually shortened to HELOC. 

Home Equity Loan

A home equity loan is a loan that you will receive based on the equity you have in your home. It is often termed a second mortgage, and it comes with a fixed interest rate. This could make it more predictable when compared to a HELOC, which has a variable interest rate. A home equity loan will also provide you with a lump sum, so it could be a great option if you know exactly how much money you need to borrow when you apply for the loan. In general, you should be able to borrow up to 80 or 90 percent of the equity in your home. 

HELOC

A home equity line of credit is a type of credit that allows you to borrow against the equity in your house up to a certain limit. In general, a lender should allow you to borrow up to 80 percent of the equity you have in your home, but it may vary depending on your financial situation. The lender should give you a certain amount of time within which you are allowed to withdraw money against the equity in your home. This is usually several years. Then, there will be a repayment period, within which you need to pay back the interest and the principal. This period could last 20 years. With this option, you can withdraw money, make monthly payments on it, and then withdraw more money if you need it. 

Decide Which Is Right For You

These are just two of the many options available, so consider reaching out to a professional who can help you decide which one is right for your needs. 

 

Filed Under: Mortgage Tagged With: HELOC, Home Equity, Mortgage

Contact Coleen

Coleen Tebockhorst

Coleen TeBockhorst

Senior Loan Officer

Call me! (612) 701-8512

NMLS #274205

Download My Mortgage eGuide today

Bay Equity Logo

Categories

Our Location

3800 American Blvd. West, #1500
Bloomington, MN 55431

Connect With Me

Bay Equity LLC is not authorized by the New York Department of Financial Services and is not intended for use by consumers in the state of New York.

Categories

Archives

Bay Equity Home Loans
NMLS ID#76988
Equal Housing Opportunity
MLO NMLS #274205
Privacy | Disclosures

Copyright © 2025 · Powered by MySMARTblog

Copyright © 2025 · Genesis Sample Theme on Genesis Framework · WordPress · Log in