HELOC / HEA

HELOC (Home Equity Lines of Credit) and HEA (Home Equity Agreements) both allow homeowners to borrow against the equity in their homes, but they function differently. A HELOC is a revolving line of credit with a variable interest rate, providing flexibility to borrow funds as needed during a draw period. In contrast, a HEA provides a lump sum with a fixed interest rate and predictable monthly payments over a set term. HELOCs are often used for ongoing expenses or projects, while HEAs are better suited for one-time, large purchases or debt consolidation. Both options can offer lower interest rates than unsecured loans, but it’s crucial to consider the risks of using your home as collateral. Carefully evaluate your financial needs and repayment abilities before choosing between a HELOC and a HEA.