Before you consider making a Home Equity Line of Credit or a Second Mortgage Loan look at the benefits that each one provides and pick the one that best serves your needs.

A Home Equity Line is a revolving line of credit that gives you immediate access to cash as needed. You can open a line of credit based on the available equity you own inyour home. You are under no obligation to use the money, but if you need cash you just write a check from your Home Equity Line. In most cases this type of loan comes with the option to make interest only payments. As you reduce your debt the line of credit increases for future use.

A Home Equity Line doesn't have a set time for the loan to be paid off. Interest on this type of loan is usually a variable rate. The IRS may allow you to deduct home equity interest paid but it is best to consult with your tax advisor.

With a home equity line of credit you can have immediate access to cash, improve your home, pay off debt, and provide for educational needs.

SECOND MORTGAGE refers to the lien position on the property. This type of loan permits the existing homeowner to use the equity in the house without disturbing the terms on the first mortgage. This type of loan is typically used when a homeowner is looking for a set amount to borrow and a fixed interest rate with set terms. There are closing costs associated with a second mortgage. The interest rate is usually higher than a first mortgage rate because of the risk to the lender. Interest paid on a first or second mortgage is tax deductible with certain limitations. It is best to consult with your tax advisor on the interest you may deduct.

Listed below are a few examples of what a second mortgage loan can help you do.

• Debt Consolidation
• Home Improvements/Repairs
• Cash out
• Education