Home Equity Loan Vs. Home Equity Line: Which is Right for You?

Like many people, you may want to tap into the equity you've built up in your home for any number of reasons. A new car, small business expenses, education, debt consolidation, home improvements – these and others are all common reasons people take advantage of the investment they've made in their homes, and here are just a few of the reasons:

Higher credit limits and lower interest rates than other loans or credit solutions
Possible tax deductions on interest paid¹
Keeps personal investments intact for your future plans
Paperwork kept to a minimum

¹Consult your tax advisor regarding the deductibility of interest.

Home equity products have a great deal in common, so it’s understandable that you might be a little confused as to which one will work best for your specific situation. Your financial advisor will be happy to answer any questions you might have in differentiating the two, but in the meantime, the following may help as well.

	Home Equity Loan	Home Equity Line of Credit
Why would I choose?	I have the need for a lump sum to consolidate or make a large purchase.	I need to access available funds to finance recurring expenses.
What types of interest rate options do I have?	Fixed rate	Variable rate tied to the Prime rate plus a margin.
How will I gain access to to my funds?	Entire amount is received at closing (after recession period if collateral is primary residence).	Similar to a checking account. When I have a need, I write a check. (Check access is not available in Texas.)
What are my repayment options?	Predictable monthly payments that stay the same.	Monthly payments that vary depending on the current interest rate and amount borrowed.
This home equity product is right for me if:	I want the stability of regular monthly payments I need a simple solution for a one-time need	I have multiple needs now and will have in the future I prefer flexible payment options I am not concerned with changing rates
Application fee	None	None

Financing is provided by Edward Jones Mortgage, LLC, an affiliate of Edward Jones. Edward Jones Mortgage, LLC is licensed by the Department of Corporations under the California Residential Mortgage Lending Act, is licensed by the New Hampshire Banking Department. Edward Jones Mortgage, LLC may not be available in your area. Equal Housing Lender. ©2007 Edward Jones Mortgage, LLC. All Rights Reserved.

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