July 3, 2024 – St. Louis, Missouri – Home Equity Loans vs. Home Equity Lines of Credit

It’s officially summer, and with that comes fun home projects! A lot of time is spent outdoors tidying up the yard and landscaping, dreaming of putting in a pool, and maybe adding a screened-in porch. But summertime also tends to bring out all sorts of lovely maintenance for homeowners. Air conditioning units that have been working overtime suddenly break. Severe weather and storms can cause flooding
and hail damage. Borrowing money from the equity you have in your home may be a perfect solution to these expenditures, big or small. In these situations, understanding the factors to consider when choosing between home equity loans and home equity lines of credit (HELOC) can provide a sense of guidance and
help you determine which is the best fit for your needs!

Home Equity Loan:
When extra funds are needed for a quick home repair, a pricey new purchase, or even medical bills, a home equity loan is a great choice. Here are some facts about what this type of loan entails:
– Typically have a fixed interest rate
– Lump sum of money all at once
– Repayment is similar to a regular mortgage, where payments are collected monthly.

Home Equity Line of Credit:
A HELOC is better suited for long-term projects, like a home renovation or addition. Details on this type of line of credit are as follows:
– Typically have variable interest rates
– Instead of receiving a lump sum of funds upfront, funds will be disbursed as needed throughout the duration of the project.
– Borrowers are able to borrow, repay and borrow again from the line of credit during the draw period, after which there is a repayment period where the borrower can no longer draw from the line of credit and must
repay the outstanding amount.

In the current financial economy, it’s wise to know all the options at your disposal when it comes to taking out loans. Borrowing from the equity in your home may be a great way to knock out some small home projects, pay some bills, or go all out on the home addition you’ve been dreaming of.

Contact a loan officer at Gershman Mortgage today for more information on these two loan types to get
started!

About Gershman: Communities, families, and homes are at the heart of what we do at Gershman Mortgage. Our founding principles are based on the core values of honesty, integrity, the entrepreneurial spirit, and putting our customers first. We are passionate and committed to customer service and strive to ensure that we exceed the expectations of our customers. We are a customer-centric company devoted to
creating and maintaining long-lasting relationships.

NMLS #138063 16253 Swingley Ridge Road Suite 200 Chesterfield, MO 63017 (800) 457-2357 Equal Housing Lender.