Declining home values in some areas of the country have made it hard for homeowners to borrow from their equity. Fortunately, such problems don’t really exist in Illinois. Cities like Chicago and Springfield have seen huge increases in the last few years. If you own an Illinois home, you could take out a home equity loan or a home equity line of credit to get money for debt consolidation, home remodeling, education expenses, or other costs.Loans and lines of credit work much like a second mortgage, because they are secured by your property. Each equity option has pros and cons, which makes deciding between the two rather difficult. Here is an overview of each type of equity financing:Illinois Home Equity LoansAn Illinois home equity loan allows you to borrow money from your home’s equity in one lump sum. This type of loan usually has a fixed interest rate and a term that can last anywhere from 3 to 15 years. The advantage of a home equity loan is the fact that rates don’t fluctuate; the disadvantage is that you can’t get more money out of the loan without refinancing. Currently, rates on Illinois home equity loans average 7.53 percent.Illinois Home Equity Lines of CreditAn Illinois home equity line of credit works a lot like a credit card. You are allowed to borrow up to a specific amount of money during a specific amount of time. As you make payments on the principle, your credit revolves, allowing you to borrow again and again. The drawback is the variable rate that is common with this sort of financing; it can make your payments very unpredictable. Currently, rates on Illinois home equity lines of credit average 7 percent.
