Home Equity Fixed Loan

You may prefer a home equity fixed rate loan compared to a home equity line of credit programs. Home equity fixed rate loans offer a wide variety of amortization periods (length of time to pay it back), more choices for people with less-than-perfect credit, fixed rates so your rate can never go up and the interest paid may also be tax-deductible.

The home equity line of credit is at an adjustable rate. An adjustable rate is subject to change. On HELOC's the rate will change when the Feds either raise or lower the prime rate.

By getting a fixed rate first mortgage you can give yourself peace of mind. The peace of mind that comes from knowing that your mortgage payment is not going to go up is priceless. This is especially true for borrowers on fixed incomes. Borrowers that are on fixed incomes do not need the stress of adjustable rate mortgages.

Advantages
. Fixed payments.
. Interest may be tax deductible.

Disadvantages
. Higher interest rates than on 1st mortgages.
. Harder to refinance your first mortgage.