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Benefits of an Equity Line of Credit – (second mortgage)

Many consumers have welcomed the ever-increasing trend of an Equity Line of Credit as one of their primary credit options. An equity line of credit allows you to use the existing value contained within your property to access additional funds via a lender. In addition to allowing you the freedom to take control of your financial future, an Equity Line of Credit creates refinancing possibilities that you may have never thought possible.One of the most popular forms of an Equity Line of Credit is a Home Equity Line of Credit. If you own a home, you have available credit contained within these walls. This credit allows you the opportunity to make improvements to your surrounding, buy the boat or R.V. you always wished for, or solidify your financial base. All of this is available if you are the primary owner of your home. Your home’s appraised value is the refinancing opportunity you need to achieve a financial foundation. Consumers have flocked to this form of financing due to its relative simple basis– access money you already have.The Home Equity Line of Credit, or the Home Equity Loan, follows a simple course. You began by seeing what your home’s appraised value is. Within this nest egg is the opportunity to expand you financial horizon. Next, the lender and yourself determine an appropriate percentage for which will be leant. Upon agreement, this percentage is figured in with your home’s appraised value. And once the numbers have been crunched, you are given the amount of this loan. This is not pre-determined loan amount which you have no control over; this a mediated number that both you and your lending professional have deemed appropriate for your situation and lifestyle–A Personalized Home Equity Line of Credit. Creation of this line of credit provides innumerable freedoms when compared to that of your average credit card. This money is not being borrowed from a faceless corporation; a Home Equity Line of Credit uses what you have already earned and created to build whatever you need or yearn for.This line of credit is available for use immediately upon approval. Many lenders, due to the competitive nature of the money market, offer low introductory rates that give the consumer many choices during the beginning of their loaning period. This allows the consumer to either ease into their payments, or pay off their initial purchases at a fraction of the cost they would be paying with an exorbitant credit card. And, unlike a credit card, which can drag you into a lifetime of debt, an Equity Line of Credit is established only for pre-determined period–you get the money when you need it, and when the loan has run its course and served its purpose it is paid and done. No years of dragged out finance charges, just concise effective financing. The APR for your line of credit can be either a fixed rate or variable rate, depending on what you and your lender see fit for your situation. Variable rates will always be published and immediately available for reference.The Benefits of an Equity Line of Credit are usually compared to the benefits of a Second Mortgage. The Second Mortgage is an available option with different parameters. A Second Mortgage is a predetermined amount of money available to the lender that must be paid in fixed increments, at fixed points in time. When compared with the Equity Line of Credit, it does not allow the personalization characteristics, but it does provide a little more stability. The Second Mortgage is just a second option for a consumer who wants to maximize there available financing.There are two sizable factors that must be accounted for when choosing between these two options. The APR for a Second Mortgage is not the only expense that applies; finance charges and points are also added to the total of money out of your pocket. Unlike the Second Mortgage, “the APR for a home equity line of credit is based on the periodic interest rate alone. It does not include points or other charges.”While following the same line of thought within mortgage matters, the Adjustable Rate Mortgage is another option. This option allows the consumer to choose an alternative root to the Second Fixed Rate Mortgage. This financing option gives you a more independent style of financing. Within the Adjustable Rate Mortgage is the opening to realize maximum potential for your value. This loan follows market trends and variable rates to diversify your APR.All of these options are available to you. Choosing between them should follow the same train of thought as choosing a home. A loan is valuable step toward the creation of a complete financial outlook. Personalization is the final deciding factor within your loan. Talking to your lender and giving them your insight will create an invaluable model for success in your financing venture.

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