If you wish to take advantage of the equity in your home without refinancing costs, you have two options. You can either take a second mortgage or go in for a home equity line. With either of these options, you can write off tax interests and avoid excessive financing costs.

Second Mortgage
With a second mortgage, you can borrow any amount up to 90% of the value of your home. You can use this money to improve your financial position by paying off credit card debts or buying any major item. The lender normally pays you a single cheque for the full amount.

A second mortgage attracts very nominal fees with rates fixed throughout the loan period which could be 15 years or more. If you opt for a 15-year loan, you will be able to repay your loan rapidly without having to pay extended interest amounts.

Home Equity Line
A home equity line is like a security for you that you can cash as necessary. It can also be compared to a secured credit card that will allow you to borrow against the equity of your home. Lenders issue a credit card or issue cheques against this line of credit. Normally the rates of such loans are adjustable and depend upon when the loan is taken out.

You are free to use this secured loan in one go or at intervals. In order to get a low rate you can make a large deposit and apply for the home equity line.


Choosing The Right Financing Option
You can choose the financing option depending upon your need as both options have their own advantages. If you want a fixed rate and wish to make small monthly payments over a long period, you can go in for a second mortgage. This is ideal for large projects such as removing credit card debts or refurbishing your home. That said, a home equity line can offer flexibility if you want to make small purchases.

Find out about another mortgage type called Mortgage with CCJS which are home loans given to people waiting for County Court Judgements.