Minnesota Home Equity Loans
Whether it’s a home equity line of credit (HELOC) or a home equity loan; homeowners in Minnesota are taking advantage of the competitive rates and terms offered by local lenders. Home improvement, repair, debt consolidation, auto loan purchase or college tuition are only a few ways homeowners are using a home equity loan or line of credit to finance important endeavors. Making a decision about which home loan type to use can be confusing. Both home equity loan products use the equity in the homeowner’s home as collateral; however a home equity loan functions differently than a home equity line of credit (HELOC).
For example, if a homeowner in Minneapolis-St. Paul (55401) wants to consolidate the myriad of credit card debt into one, neat monthly payment (debt consolidation); a home equity loan may be the right fit. A home equity loan is offered at a fixed interest rate, with a pre-determined monthly repayment schedule. The borrower receives one lump sum of cash that can be used to cover one or several large items at once—such as paying offer creditors. The advantage to debt consolidation using a home equity loan is that in addition to having only one monthly payment, home equity loans typically have a lower interest rate than offered on credit cards. An example of how a home equity line of credit (HELOC) is useful could be with a homeowner in Cottage Grove (55016) in need of paying for college tuition. This revolving line of credit allows the borrower to access a steady cash stream an on ongoing basis and allows the borrower to make payments only on money drawn against the line. The home equity line of credit (HELOC) rate is variable; so repayment amounts may change.