Line of
Credit
Line of Credit Home Loans-
Equity Loans
Line of Credit
A line of credit loan can be likened to a giant
credit card. For example, if your home is worth $300,000
dollars and you borrowed 80% of it's value you would
have a loan of $240,000. As you repay the loan, you are
able to access any equity available. For example if your
loan balance was down to $180,000 you could immediately
access up to $60,000 without applying to the lender.
Line of Credit or Equity loans have been promoted as
being effective in paying off your mortgage more quickly
but this happens only if you are very disciplined in
your spending habits. For many people the temptation to
keep the loan up to it's limit is too great and for
them, and an equity loan is not the best choice.
Line of credit loans work very well for the
disciplined borrower, and for investors who need instant
access to cash to take advantage of any bargains that
come across their way.
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