Benefits of a Fixed Rate Home Equity Line of Credit

 


Visitors: 463

A fixed rate home equity line of credit gives you easy access to low interest credit. It also provides you with stability, helping you know how much your rates will always be. The greatest savings can be seen over time if rates increase. So, even if you don't plan on using that credit line now, it may be a good idea to keep it open for the future.

Easy Access to Low Interest Line of Credit

With your home's equity as your collateral, you can qualify for low rates with a home equity line of credit. Compared to other sources of credit, you will find it hard to secure a better rate on credit, and interest paid is deductible from your taxes in most cases.

Unlike an equity loan, you can access your credit when you need it. Usually a debit-like card is issued to you from the lender. You can use it like a credit card.

Fixed Interest Rates Offer Long Term Stability

Fixed rates provide a borrower with stability, always knowing what their rates will be. This is especially good when rates are low. However, adjustable rates may initially be low. In some cases, rates can even drop.

Fixed rates are for those that want the security of a permanent rate. While not without risk, fixed rates can give peace of mind. Remember too that with most lenders you can either convert or refinance your line of credit to an adjustable rate in the future.

Long Term Savings with a Fixed Rate Line of Credit

For long term debt, a fixed rate can potentially see an interest savings for borrowers. By locking in a low rate now, you will see a savings if rates rise. Over the long term, this could save you some significant cash.

With a line of credit, you don't have to use it. So if rates are significantly low, consider opening an account to use in the future when/if rates are higher. You always have the option of closing the account if rates are high and opening one with lower rates.

Before applying for credit, be sure to compare both rates and fees to find the most competitive financing package.

Here are our Recommended Home Equity Lenders Online.

Carrie Reeder is the owner of ABC Loan Guide , an informational website about various types of loans.

(424)

Article Source:


 
Rate this Article: 
 
Banks Freezing Home Equity Line of Credit Is Your Equity Lost
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Second Mortgage Analysis - Fixed-Rate Equity Loan Versus a Home Equity Line of .

by: Maria Ny (June 05, 2006) 
(Finance/Debt Consolidation)

Benefits of Fixed Rate Home Equity Loans

by: Mary Ny (September 27, 2006) 
(Real Estate)

Home Equity Line of Credit Interest Rates - Variable vs. Fixed Rates

by: Carrie Reeder (December 21, 2005) 
(Finance/Mortgage Refinance)

Can I Refinance My ARM to a Fixed Rate Mortgage What If I Have No Equity Or Bad .

by: Darin Sewell (July 29, 2008) 
(Finance/Mortgage Refinance)

Home Equity Line of Credit, Bad Credit Home Equity Loan and Home Equity Mortgage

by: Ken Bissonette (December 18, 2005) 
(Finance/Loans)

Debt Consolidation Solutions with Fixed Rate Home Equity Loans

by: Nick Rian (August 02, 2006) 
(Finance/Debt Consolidation)

Lowest 30 Year Fixed Rate Mortgage - Home Equity Loans Online

by: FrankW Ellis (January 12, 2007) 
(Real Estate)

Fixed Rate Home Equity Loan Versus Adjustable HELOC: Comparing 2nd Mortgage ..

by: Maria Ny (July 10, 2006) 
(Finance/Mortgage Refinance)

Decision Time: Home Equity Loan or Home Equity Line of Credit?

by: Tim Paul (January 29, 2005) 
(Finance/Mortgage Refinance)

Banks Freezing Home Equity Line of Credit Is Your Equity Lost

by: Shaun Greer (July 05, 2008) 
(Finance/Home Equity Loans)