Home equity loans are an increasingly popular way to raise cash. Find out what the risks and rewards are.
Your home is your castle -- and sometimes it's also your bank. The equity in your home -- the current appraised value minus the amount owed on the house -- can be tapped through loans at lower interest rates than credit cards. This chapter defines the types of home equity debt and the pitfalls of each. We also look at the tax advantage and low interest rates that make them such a popular option for borrowing.
What you can expect to learn from this chapter:
- What home equity debt is
The two types of home equity debt -- home equity line of credit, or HELOC, and home equity loan -- are explained.
- Why they are popular
Their low interest rates and tax deductibility make these loans attractive. Plus, links to Bankrate's calculators to find the best rates.