Equity is the difference between what you owe on your home and the value of your home

by Shane - Date: 2007-06-06 - Word Count: 269 Share This!

Equity is the difference between what you owe on your home and the value of your home. When you take a home equity loan you are in actual fact borrowing the equity of your home. These loans are for home owners to finance any project and there is no control by the lender what the money has to be used for.

A loan can be obtained either in a lump sum or as a revolving line of credit. The line of credit works well as money does not get wasted and will be drawn as it is required. The loan rate on this loan is usually tax deductible, so this is also a benefit to the home owner.

These loans are very popular with home owners if they need cash for any purpose. They are often used for home renovations. This is a good investment of the proceeds of the loan. Renovations are important in keeping up the value of the home.

An equity loan is an excellent way of paying college or university tuition fees for a member of your family. As this expense can be a great burden on the family budget it is great to have a way of raising the money through the loan.

If you were looking for cash to invest in some safe project with a high turn over you could invest the proceeds of your loan for a short period of time. You would just have to make sure that you were making a profit so first calculate the cost of the interest and loan charges on the loan.

This author writes informative articles on various subjects.

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