Let Bank of the Commonwealth Mortgage unlock the door to the cash in your home with a Home Equity Loan or a Home Equity Line of Credit. Whether you need money for home improvements or simply want a tax deductible loan for the purchase of a new car, boat, or motor home, Bank of the Commonwealth Mortgage can assist you in making any or all of these options a reality, with programs that leverage the equity in your home. With great rates and generous loan limits that allow you to borrow against your home’s value, an equity line is a must for anyone who currently owns their own home. Bank of the Commonwealth Mortgage offers some of the most competitive home equity programs available, including interest-only and fixed-rate programs. Low documentation programs are available for self-employed borrowers. For primary residences, up to 100% financing is available and, for investment properties, up to 89.99% financing is available.

Both a home equity loan and a home equity line of credit provide the homeowner the opportunity to turn the equity built up in his home into cash. Beyond that similarity, the home equity loan and home equity line of credit are vastly different. The home equity loan is a one-time lump sum which is paid off over a set period of time. Equal monthly payments are set according to a fixed interest rate over the life of the home equity loan. Once the funds are obtained from this loan, no further money can be drawn from the loan. On the other hand, the home equity line of credit is more like a credit card since it involves a revolving balance. The line of credit allows a borrower to borrow up to a certain amount over the life of the loan and the borrower can withdraw money as it is needed. As the principal is paid off, the credit can be used again, much like a credit card. Home equity lines of credit respond to variable interest rates which affect the monthly payment.

Advantages and Disadvantages of a Home Equity Line of Credit

Advantages:

• Only borrow what is needed.
• Interest is paid only on what you borrow.
• Borrowers granted flexible access to funds.
• The interest may be tax deductible.

Disadvantages:

• Rates can change with the maximum interest rate as normally high.
• Payments can change.
• It is more difficult to refinance your first mortgage with a home equity line of credit.