Both allow you to borrow against the appraised value of your home, providing you with cash when you need it. Here's what the terms mean and the differences between a home equity line and loan that can help you figure out whether they're the right fit for you. Show
If you’ve built up equity in your home—if it’s worth more than the balance on your mortgage—you may be able to use part of that value to meet financial needs such as cash for home improvement projects, education expenses or to pay for unexpected costs. Home equity lines of credit (HELOCs) and home equity loans (HELOANs) are two ways to achieve similar ends. But they are different, and understanding how each one works can help you decide whether one or the other might work for you. Unlike a conventional loan, a home equity line of credit is something you establish ahead of time and use when and if you need it. In that way, it’s a little like a credit card, except with a HELOC, your home is used as collateral.
What is a home equity loan?If a HELOC resembles a credit card, a home equity loan is more like the original home mortgage. You borrow a specific amount, and then you make regular payments during a fixed repayment period.
How can you use home equity?Your home may be your most valuable asset, and borrowing against your equity in it could free up cash for any of several purposes. You might use the money to:
Is a home equity line or loan right for you?A HELOC gives you the flexibility of a financial backstop that’s there when you need it. If your roof needs repair or a tuition bill comes due when you’re short of cash, drawing on a home equity line of credit can be a convenient solution. You decide when to use the funds, and you pay interest only on the money you actually use. On the flip side, with a HELOAN, you get a lump sum of cash at loan closing, and know how much your monthly payments will be and how long it will take to pay off the loan. With either, the amount you can borrow will depend on the value of your home and the amount of equity you have available. And with both, it’s important to remember that you’re using your home as collateral—and it could be at risk if its value drops or there’s an interruption in your income. But if you qualify and your financial situation is stable, a home equity line or a home equity loan could be a helpful, cost-effective tool for making the most of your home’s value. What are the differences between a HELOC and HELOAN?
How do I access my HELOC account?Typically, you can withdraw money from a HELOC using the following methods:. Credit card.. Check.. Cash withdrawal from bank branch.. Online account transfer.. Account transfer request by phone.. How do I check my Bank of America home equity status?Sign In to View Your Home Equity Application Status. Sign in with your Bank of America Online Banking ID and Passcode.. Sign in with your home equity application ID and Passcode.. Create your home equity application ID and Passcode.. How do I access my home equity funds?The most popular ways to access your home equity without selling the home are: Cash-out refinance, a HELOC or a home equity loan. All three work in different ways and have a different time period for when you receive the funding.
How do I pay off my Bank of America HELOC?Use Bank of America Online Banking to make your regular monthly mortgage payment, make a payment directly to your principal or make a payment to your escrow account. You can also request a payoff statement. Log in to Online Banking or use the mobile app.
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