Home Equity Loans and Lines of Credit

Ah the cycle of (debt) life ... Once you've racked up a bunch of credit card bills (after buying all that cool geek stuff), it's inevitable that you'll look for a better deal on that debt. For some folks, it's an endless cycle. Rack 'em and pay 'em down. Homeowners with a considerable amount of debt often tap the equity in their homes to help ease those cash flow problems while freeing up enough cash to buy more gotta have stuff--whether it's this year's killer PC, monster flat screen TV, or a snazzy new ride.

To tell the truth, home equity is a great thing when used properly. As housing prices rise, so does the equity (value) you have built up in your home. If your credit rating is good and the value in your home has risen, the banks will compete with each other to put that cash in your hands.

But while that burst of cash can seem like a gift, it's always best to enter into any transaction as a knowledgeable borrower. After all, you're not getting a present ... you're merely borrowing your own money.

So lets start with the basic question ...

What's the difference between a home equity loan and a home equity line of credit?

Home Equity Loans and Lines of Credit, continued