home equity

5 questions to ask before you tap into your home equity

How long do I want to be on the hook?
How long do I want to be on the hook? | Kar Tr/Shutterstock.com

How long do I want to be on the hook?

If you think it will take five years or less to pay off what you owe, a HELOC is the best bet because those are relatively cheap and easy to set up.

If you believe it will take longer, a home equity loan might be your better choice, since they have fixed rates and payments and offer longer payback periods, typically up to 15 years.

If you think you'll need even more time, cash-out refinances may offer longer payback periods and lower rates -- but they do come with closing costs, possibly totaling hundreds or thousands of dollars.

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Ask Dr. Don

HELOC vs. reverse mortgage?

Dear Senior Living Adviser, If you have a home equity line of credit , or HELOC, for $150,000 with no balance on it, should you use it instead of a reverse mortgage? Which is a better way to save the assets if there is... Read more


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