Pros of Home Equity Loans:

• Fixed Payments: Predictable monthly payments with a stable interest rate throughout the loan term.
• Lump Sum Payout: Ideal for large expenses like home renovations, medical bills, or tuition.

Cons of Home Equity Loans:

• Less Flexibility: You can’t borrow more once the lump sum is disbursed unless you apply for a new loan.
• Risk of Overborrowing: A large payout upfront may tempt borrowers to use more than necessary, leading to long-term debt.

A HELOC is a revolving credit line that works much like a credit card—borrow only what you need, up to a set limit when you need it. You typically pay interest-only during the draw period and later repay the principal.

Pros of HELOCs:

• Flexibility: Borrow funds as needed during the draw period—perfect for ongoing or phased expenses.
• Interest-Only Payments (During Draw Period): May reduce monthly payments initially and give you better cash flow.

Cons of HELOCs:

• Variable Interest Rates: Your interest rate may fluctuate, affecting payment amounts over time.
• Risk of Overspending: Easy access to funds may lead to unnecessary borrowing and long-term debt.

• Cash out for a down payment on a new primary home
• Fund a down payment on an investment property
• Pay for major home renovations or repairs
• Simplify and reduce high-interest credit card or personal debt
• Use a combo loan for condos without reserves (with just 10% down)

• Don’t Disturb Your First Mortgage – Keep your existing low-interest mortgage intact
• Fast and Easy Closing – Get approved quickly with minimal paperwork
• Low Closing Costs – More savings when you need it most