Home Equity Loan Lines of Credit vs. Credit Cards - Which is Better? The Mortgage Store Online Report
Toronto, Ontario (PRWEB) June 12, 2006 -- The Mortgage Store Online today released an exclusive report on the rate and payment benefits of home equity loan lines of credit, showing them to be the much better option for U.S. and Canadian potential borrowers looking for low interest credit options, compared to the use of credit cards.
Currently, the interest rate for home equity lines of credit is vastly lower than the interest rates that leading credit card companies in North America offer. According to BankRate.com, lowest US rates for home equity loan lines of credit presently average out at 6.31% and the Canadian rates come as low as 6%.
These home equity rates sit much lower than credit card rates from the most popular credit card companies - MasterCard, and American Express.
* Home equity loan line of credit rates are 11.98% and 13.49% LOWER than a MasterCard credit card for U.S. and Canada, respectively. (The current interest rate for MasterCard is 18.29% for U.S. and 19.49% for Canada.)
* Home equity loan line of credit rates are 11.93% and 12.99% LOWER than an American Express credit card for U.S. and Canada, respectively. (The current rate for an American Express card is 18.24% for U.S. and 18.99% for Canada.)
Although the results of this report may surprise first time borrowers, Joe Janovich, President of The Mortgage Store Online says that this is not a new trend. "Home equity loan line of credit rates are almost always significantly lower than those of the credit card. It has been this way for many years. The real surprise that comes with this report is the number of people who aren't taking advantage of this line of credit."
Saving Tens of Thousands of Dollars
US borrowers who choose a home equity loan line of credit over a MasterCard can expect to save $26,316 for every $10,000 increment, over 25 years using the current rate of 6.31%, and Canadian borrowers can expect to save $28,116 on the same amount with Canada's rate of 6%. "Although it may seem strange to borrowers that they could save around 'twenty' thousand dollars on a mere 'ten' thousand dollar loan, the effects of interest compounding over 25 years creates a debt that greatly exceeds the original borrowed amount, especially with credit card rates that are as high as 18%," states Janovich.
The Monthly Savings
With a home equity line of credit, US borrowers would pay $66.34 a month, and Canadians $63.98 a month, on each $10,000 amount they use from the credit line. However, with most credit cards, the minimum payment alone would be $300/month on the same borrowed amount, as most credit card companies require card users to make minimum monthly payments that equal 3% of their current card debt.
Overcoming Misconceptions About Home Equity Lines of Credit
Janovich also understands that both Americans and Canadians have many misconceptions about home equity lines of credit, that lead them to choose the credit card instead. "These misconceptions make people lose out on tremendous savings. It's important that brokers and banks debunk the myths that place credit cards on a pedestal. By properly understanding and utilizing home equity lines of credit, North Americans can save money and keep their debt to a minimum."
In order to clarify and discredit the rumors about home equity loan lines of credit, The Mortgage Store Online has provided the following articles to educate both US and Canadian borrowers:
* Monthly payments on home equity loan lines of credit are lower than credit card minimum payments
* Larger borrowed amounts come from home equity lines of credit
--
Proof of income not necessary for home equity loan lines of credit
--
Broker fees do not make home equity loan lines of credit more expensive than credit cards
--
Home equity line of credit, defined
About the Mortgage Store
The Mortgage Store Online provides home and commercial mortgage loans in most Canadian provinces (excluding Quebec and the Territories), along with mortgage news and advice for all of North America. Founded by veteran mortgage broker Joe Janovich, The Mortgage Store Online couples 'real world' experience, industry relationships, customer service and secure technology with the convenience of the Web. Learn more about The Mortgage Store Online's home equity loan services and mortgage line of credit options by calling (866) 880-2577 or visiting www.themortgagestoreonline.com
###
Related Articles:
Bank Of America Credit Cards: A Look At The Top 3
You probably know Bank of America from its commercials on better banking. They are one of the major players in commercial banking and lending. Well, you know you can enjoy their ?Higher Standards? through a variety of products, including mortgages and checking/savings accounts, but did you know they have an uncommonly large pool of credit card options? ?B of A? is one of the countries top credit card providers, and their Higher Standards certainly extends to this product line as well. This article takes a quick peek at the Bank of America Platinum Visa, the Bank of America Visa Signature with WorldPoints, and the TripRewards MasterCard by Bank of America.
Credit Cards In An Instant: Getting An Online Approval For Your Credit Card Application
Credit cards offer the ultimate ease and convenience in shopping and purchases. With just a swipe, you get to buy even the most lucrative items on the shopping rack. They're the prolific things these days; these miniature cards people use to buy things - from shoes to dresses, to food, to cars and appliances. What makes them so prolific? It's the fact that they can now be easily acquired with the help of the Internet. Anyone can now apply for a credit card online. And more importantly, anyone can have their applications approved in just a matter of seconds - this is what one calls instant credit card approval online.
Credit Card Offers - Credit Card Application
Everything-Credit-Card.Com is a website that is dedicated to everything that is credit cards. On this site they offer you the best type of cards. There are the cards that offer airline miles, bad credit cards, balance transfer, cashback , there are cards with cash rebates. There are low interest rates cards and gas rebates. There are prepaids cards an rewards cards. There are so many different types that you would think that there is a card for everyone. On this site you can fill out any Credit Card Application for any card you want. What you should do before you apply for credit cards is that you should apply for a free credit report.
Credit Card Application: Getting Your First Credit Card
Credit cards are one of the most convenient tools that you can ever use today. Besides, you would really need this tool if you want to purchase something but you don't have the cash for it. With a credit card, you can virtually purchase the products or services you need even without carrying cash.
Bank Of America Credit Card Special Programs
Partnered With Hundreds
Banking and Company Credit Card Policies for Small Business
Does your small business have a banking and credit card policy? If not, perhaps you might wish to think on it. Developing such policies and procedures is not a difficult task.
The Orchard Bank Credit Cards: The Answer To Bad Credit
There are few more stressful things than dealing with dinged credit. Millions of Americans have experience with it, so there is a large pool of experience and options to draw from. The important thing to realize is that if you are determined to repair your credit, the right tools are available to help you. One option is The Orchard Bank MasterCard.
England will win the World Cup Before Banks Admit to Excessive Credit card Charges
"I have now received a reply from (your credit card provider). It says it does not accept that its charges are unlawful or unfair. ? It accepts no liability, but nonetheless says it will pay £907 (plus interest of £247.52) to settle the dispute. They say that its offer represents a full refund of all the charges [and interest that your client disputes ?."
Online Credit Card Processing - How to Accept Credit Cards - Ecommerce 101
Back in 1998 (through 2000 or so), I worked for a small company (called PaymentNet / then Signio) that handled online transactions. Verisign later purchased this company, and the product team I led integrated the "client" - the portion that took the credit card information and sent it to our servers for processing.
Your First Credit Card: Credit Card Applications
If you are a young adult looking into your first credit card or even an older adult who has just never established credit history, there are banks that can help you get started. Plenty of credit card offers out there are geared towards people who just want to establish a credit history. You can search for 0 apr credit cards and other offers online or you can go to your bank. Review your options closely, then pick one and see if you get approved. Don't apply for more than one because credit card applications show up on your credit report, and multiple inquiries tend to be red flags to credit issuers.