When you owned a home you are building equity, and many people use that equity as collateral to borrow money — Home Equity Loan, especially when they are borrowing for a big purchase.

Advantages of a Home Equity Loan are:

• Tax deductible increase
• Lower rates
• Longer payment duration

What is the differences between a home equity loan and a line of credit? A home equity loan is really just a second mortgage with the same terms and policies as your first mortgage. These terms can be a fixed interest rate, fixed monthly payment etc. However a line of credit acts like a credit card. A line of credit terms are often — variable interest rates, variable monthly payment with respect to the amount you withdraw from the line of credit.

So, is a home equity loan or a best? It depends on what you need the money for.

For non recurring expenses you should use a home equity loan — addition onto your home.

For recurring expenses you should use a line of credit — education

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