HELOC vs. standard mortgage
For a longtime I thought that a HELOC, Home Equity Line of Credit and Second Mortgage were synonymous, but now I realize that there are distinct differences between the two. From my new realization, both a HELOC and a Second Mortgage are both home equity loans, however with a second mortgage you receive a sum of money which you must repay over time. The second mortgage has a fixed steady rate that you pay over the duration. Now a HELOC is more wild and risky, in my opinion, because you are recieving a sum of money and only pay interest for about 5 years, this 5 year period is called the draw. After the draw period now you are hit with the burden of paying for the money you borrowed. I think I like the Second Mortgage better.
Home Equity California