Home Equity Line

Home Equity Line- More Than One Loan At A Time

Walking the home equity line

Take heed, young reader, for you are about to enter the excitingly dangerous world of home equity! Well, you've probably already entered this world, you're just curious about this home equity line business. What is a home equity line? Its just another term for home equity line of credit. What is a home equity line of credit? A second mortgage. Sometimes. Sometimes not.

How a home equity line works

When you decide to take out a home equity line, you are taking out a second mortgage on your home or , rarely, refinancing your first home loan. Unlike a standard second mortgage, a home equity line is broken down into two separate stages:

• the draw period, usually 5-10 years,is the time while you can pull out your loan money. This is your chance to spend away, while you are responsible for the interest alone.
• the repayment period, 10 -20 years, is when you must repay the entire loan balance. Some lenders actually demand the entire loan principal at the end of the draw period, forcing you to refinance. Others do not. Ask your lender.

Do not be afraid to ask- asking saves you money!

In fact, you should ask your lender a whole barrage of questions before you even consider taking out home equity lines:

• What is the introductory rate and period for the initial home equity line?
• What is the margin the lender charges?

Margins are the amount of interest your lender will charge in addition to the prime rate, and it is this margin that makes the principal distinction between lenders of differing lines of credit. A Countrywide home equity line will charge a different rate when compared to other lenders - they're getting their money from basically the same place, the only difference comes in the lender's cut. Use the rest of our website to make an informed, responsible decision on your home loan. It may seem silly, but don't get caught up in Scrooge McDucks lavish spending ways, and do not get bogged down so far in the city life that you cannot see the forest through the trees. Enough euphemisms, lets get cracking on some serious home equity information!

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