Home Equity Loans vs. Home Equity Line of Credit

May 13th, 2013

Not sure whether you have the funds for an important purchase? The First National Bank and Trust of Newtown is ready to assist homeowners in determining how best to finance a large acquisition – and two possible solutions are a home equity loan and a home equity line of credit.

When making a major, one time purchase — like a car — a home equity loan may be the best option.  Funds from such a loan will be received up front, in the full amount, and the term for paying it off may be as long as 10 years.  Of course, the lengthier the term, the higher the interest rate.  Also, with a home equity loan – payments for which cover both principle and interest – rates will be fixed.  These rates will vary from loan to loan, depending on duration and other factors.  Also of note, the key tax benefit of a home equity loan is that it may well be tax deductible.

Home equity lines of credit might be more attractive than loans if you’re looking into assuming an ongoing expense, like a home improvement project, or a significant personal expense, like a wedding.  These rates are tied into the U.S. prime rate which has remained steadily low in recent years and this reality makes a home equity line of credit particularly appealing.  There is immediate, ongoing access to the necessary funds, and a line of credit also offers a variety of tax-related benefits.

The goal of the lenders at The First National Bank and Trust of Newtown is to make you comfortable with your choice of home equity options and the costs and payments associated with each. They will help you take control of your financial future. If you want to talk, you can stop in at any of our local branches or email info@fnbn.com or call 215-860-9100.

What upcoming expenses do you have coming that might make a home equity loan or line of credit beneficial to you?

Margaret M. Young

Vice President

Consumer & Commercial Lending

The First National Bank and Trust Co. of Newtown

215-860-9100 – phone x3003