Differences Between Home Equity Loans and Equity Release Loans
Whenever a homeowner needs extra money for remodeling, bill consolidation, college tuition, or an emergency, the best way to obtain this money is through the equity built up in their home. What types of loans are available and what are the differences? The most common means is the home equity loan. The lender approves a loan based on the equity built up in your home. The money is repaid through monthly mortgage payments. With Equity Release Loans, the amount of money loaned is also based on the value of the house but with one big difference. The loan does not have to be repaid until a later time, so the homeowner has the advantage of receiving the money he needs now without the burden of a monthly payment. Equity Release Loans are generally repaid when the homeowner dies with the payment coming from the estate. These loans are considered ideal for senior citizens and anyone who doesn’t care about leaving an inheritance.
