Fixed Rate Equity Home Loan Against Non-Fixed Rate Equity Home Loan

Okay, you have now finally decided to go in for a loan with collateral against your equity in your home. Whatever, may be the reason for you to take up this Commercial Property Loans you need to ask one basic question before taking up such loan that for you what kind of equity home loan is correct; non-fixed rate equity loan or fixed rate home loan? Both the types of loan mentioned have different interest rates and payment structures. Therefore, to further improve our understanding, let's look in a bit more detail at each of the available types.

Equity home loan of non-fixed rate type is commonly named as equity line of credit. Such type of loans gives the person who has taken the loan the ability to borrow money equivalent to the equity that the person has in his/her house and that equity is used as a collateral or security. However, instead of providing the full amount at the outset, the person can periodically withdraw small sum of money that total's up to his equity value or the loan amount. For example, if a person has taken a loan of $5 million, he or she can withdraw $1 million annually i.e. in installments. The borrower, in this get's all the money; however, in installments though.

In equity home line of credit, interest rates are flexible and it can be adjusted as per the borrower's preference. The borrower can decide the factors in an Loans Against Land like the loan amount, minimum monthly installment required, repayment rate, etc. This kind of loan is greatly flexible; however, it can be very risky too. The constantly changing interest rates cannot be predicted and it may sometime result in ballooning up your interest payment. This loan is useful at the time of declining interest rates as your interest payment will keep on declining; however, in case of rising interest rate this type of borrowing can be very dangerous.

In equity home loan of fixed rate, the person gets the entire Commercial Mortgage Rates  amount in one time. Next, the person is required to pay as per fixed rate of repayment based on fixed term of full loan repayment. This kind of loan suits people who have the ability to plan their repayments and can follow the payment term. People or borrowers who need big amount of money instantly should look for a equity home loan of fixed rate.