If you have at least 10% equity in real estate such as your home, you may qualify for an equity line of credit or loan. The loan uses your real estate as collateral and allows you to borrow up to a specified limit. Funds can be taken at any time and, depending on how the loan is structured, it may be paid whenever you want during the specified time period.
Who Should Apply:
Individuals or businesses with 10% equity in real property
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Advantages
Start-up fees are low.
Equity loans are available at most banks and financial institutions.
Interest payments are often tax deductible.
Lenders do not require spending reports.
Disadvantages
Credit requirements can be strict if your equity is not very high.
If the interest rate varies with the prime rate, the payment amount will fluctuate through the life of the loan.
