Should You Get An Open or Closed Loan?
Posted on June 29, 2009
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Home equity loans can be open or closed end loans. You should really brush up on your loan terminology if you do not know what these terms mean and you are considering a home equity loan.
Open End Loan
An open end home equity loan allows you to borrow against your home equity in small amounts as needed. It is kind of like a line of credit. You can usually keep it open for a long period time and just take money when you need it as long as the equity is available.
Closed End Loan
A closed end home equity loan is more traditional. It is when you get a lump sum at one time. You can usually get a percentage of the equity in your home, although getting 100% is also possible.
It really depends upon your need for the loan as to which you decide to get. Make sure you discuss your options with your lender before deciding.
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