The equity in a home is a source of financial strength. Homeowners use that strength as a source of financing for purchases, debt consolidation, and home improvement projects. Consumers visiting a financial website should have the opportunity to determine how loans or lines of credit can be used to meet their financial needs.
Home equity loans and home equity lines of credit are similar in as much as borrowers are using the equity in their home as collateral. The two types of loans differ in some notable ways. Selecting either a home equity loan or line of credit may depend on how you want to use the loan.
A home equity loan will give you all of the loan amount up front, and you will make principal and interest payments from the start of the loan. For a line of credit, your lender will give you access to the cash as you need it. Your repayment plan will differ as well. In some cases, you may only make monthly interest payments or a small percentage of the outstanding loan balance.
Use this calculator below to find out how much equity you have in your home.