Colorado Home Equity Loan
Learn more on Colorado Home Equity Loan.
Want to pay for children education, consolidate high interest bills, home improvement.... this Loan can fix it.
This loan consists of 2 main types.
1) Home Equity Line of Credit (HELOC) - is a type of revolving credit, you are required to pledge your home as collateral. Term defined as draw period, which you are permitted to draw of any amount you want (within loan limit) at any time. Repayment each months is based on balance. The interest rate is variable.
2) Second Mortgage (Home Equity Mortgage) - is form of credit which required borrower pledge their home as collect. Generally lenders are offered fixed rate and monthly fixed repayment for this option.
Advantages of HELOC and Equity Loan
- interest rate for this line and loan are lower than credit card & other type of non-secure debt.
- The interest pay on credit cards and other types of loans is not tax-deductible. But for this loan can be deduct, provided your line or loan do not exceed the market value of property.
- May draw a larger amount for varies uses and suitable for long term financing.
Disadvantages of HELOC and Equity Loan
- Collateral required, otherwise you won't entitle for the loan.
- Payment defaulted will cause loss of the house pledged, lenders may foreclosure the house to compensate their losses.
- More favor to those with good credit, those with bad credit are unlikely to get the loan or higher interest will be charge.
No matter which one you choosed,be sure that you have a proper pay back plan. Make your monthly installment on time, do not defer.
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