Home Equity Loan vs HELOC: Which Is Right for You?

What’s the difference between a HELOAN (home equity loan) vs a HELOC (home equity line of credit)? And which one is the better option for pulling equity out of your home? At the end of the day, determining whether a HELOAN vs HELOC is better depends on what your goals are, the timing, the rate, and the loan term.

A home equity line of credit allows you to tap into your home’s equity and functions like a credit card. You’re provided with a line of credit that you can draw on as needed, which can good for things like consolidating high-interest debt or paying for home renovations that have a flexible budget. This type of loan comes with an adjustable rate.

On the other hand, a home equity loan, also known as a 2nd mortgage, has a fixed rate and provides borrowers with a single lump sum. This gives you the cash you need to cover big expenses while also providing stability and predictability when it comes to repayment.

In this video, Bill Lyons — a licensed real estate broker and the owner of Griffin Funding — breaks down the difference between a 2nd mortgage vs a HELOC. Visit our website to learn more about home equity loans and home equity lines of credit!

You can also email [email protected] to get in touch. We'll connect you with an experienced Loan Officer who can answer your questions and help you capitalize on your home equity!

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