Types of Home Equity Loans
The home equity loan can be applied by filling the application form on the online and generally the approval time varies from loan to loan. Many borrowers get an instant approval as soon as they apply online. However, in some cases we will need additional information before we can arrive at a credit decision.
There are basically two types of home equity loans. A traditional home equity loan also called as second mortgage and a newer type is a home equity line of credit also abbreviated as HELOC.
The traditional home equity loan is a loan in which the bank/lender offers you a lump sum of money that must be paid back within a period of time. In this type of home equity loan the interest rate begins as soon as the bank/lender issues you the money.
While in the newer type that is the home equity line of credit the bank/lender will issue you a checkbook or the credit card to purchase, which then will accrue from the home equity. In this type of loan that is line of credit the interest rate begins only after you make the purchase actually. These allow you to borrow up to a certain amount for the life of the loan - a time limit set by the lender. The helloc gives you more flexibility than a fixed-rate home equity loan.
There is several ways for the repayment of an online home equity loans. The most common and popular way of repayment is to make regular payments towards your interest and principal. It is possible to remain in debt with a home equity loan, paying only the interest and not paying down the principal. The time period for the home equity online loan repayment is usually the shorter period than the first mortgages.
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