Posted by nick_niesen in Finance on October 29th Keanu Neal Jersey , 2010


Although there are variations in a second mortgage and the home equity loan, many homeowners are still confused about the difference between the two. Second mortgages are a type of home equity loan; however, home equity loans are usually termed as a line of credit. For making the most of the built up equity, it is essential to determine whether a second mortgage or a home equity loan is the right decision.


Before you decide upon any of the two, you ought to know the basics of second mortgage and the home equity loan.


Second Mortgage Vs Home Equity Loan


Second mortgages pay out a predetermined sum of money, as either a line of credit Takkarist McKinley Jersey , in monthly installments or all at once. It is then paid back in a particular schedule just like the original mortgage. Dissimilar to refinancing, second mortgages do not supersede the initial mortgage.


Typically, second mortgages are 5 to 30-year mortgage loans that have a fixed rate of interest. Just like the original mortgage loans, the points and interest rate would be based on the present credit history, the current interest rate, and pricing of the house. The interest rates on a second mortgage are a little higher and the fees lower.


In contrast Alex Mack Jersey , home equity loans are similar to the credit card, and may even include credit cards for making purchases. When an individual has equity on the house, he or she can acquire extra cash by means of the home equity loan.


These loans can be paid at the same time or in small payments