There are many advantages of securing a home equity line against
your home's value. Whether you need to consolidate debt or
simply enjoy the reassurance behind having an emergency line of
credit it's important to understand how home equity lines can
benefit you. Some of the most popular ways consumers use home
equity lines are:
Consolidate credit card debt
Probably the reason why
most consumers take a home equity loan along with a possible tax
deduction and easier approval criteria than unsecured personal
Use the existing equity in your home
to make improvements such as another floor, an additional
bedroom or even a garage.
Emergency Line of Credit
Once a home equity line of
credit has been established many lenders will allow you to draw
on this line for an extended period of time (usually 10 years
minimum) without the consumer having to qualify again.
Mortgage Insurance (PMI)
If you are putting less than 20% down on a new home many lenders will require PMI (private mortgage
insurance) however combining a traditional first mortgage with a
home equity line may alleviate the need for this insurance.