2 Options for Choosing a Second Mortgage

If you want to take out a second mortgage on your home, then you will need to consider the different options available to you. There are a couple of types of second mortgage, one known as a home equity loan, and the other the home equity line of credit. While they may sound the same, the different options that you have for choosing these can have very different consequences.

1. The Home Equity Loan

This type of second mortgage will allow you to take out a specified amount of money for a restricted period of time, either at a fixed or an adjustable rate, rather like an ordinary mortgage. This type of mortgage is a good way of increasing the mortgage on your home, or obtaining money for home improvements, a new car, or other things.

2. The Home Equity Line of Credit

The Home Equity Line of Credit second mortgage will allow you to have money sitting in the mortgage which you can borrow as and when you need. This type of home loan will allow you to pay for items needed around the home, simply by writing a check. The latter type of mortgage has an adjustable interest rate, and will only be payable on the amount taken out of the account.

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