Do you always look forward to your tax return? Do you frequently get monetary gifts during holidays and birthdays? While it can be tempting to spend that extra dough, putting at least a portion towards your savings can save you a lot of heartache in the future.

Learn about the Pros and Cons of a Home Equity Line of Credit (HELOC).

As you research home equity lending options, such as a home equity line of credit (HELOC), make sure you consider the pros and cons of each product before making a decision. Those factors will vary based on your plans for the money and the prospective lender.

A home equity line of credit (HELOC) may be a good option if you’ve built sufficient equity in your home, and you want to pay off your mortgage right away. When approved for a HELOC, homeowners can expect lower interest rates than what they pay on a mortgage loan. Lower interest means more savings and possibly paying off the loan sooner.

If you own investment property, you may be able to leverage your investment through a home equity line of credit, also known as a HELOC. A HELOC is a revolving line of credit tied to the equity you’ve built in your property. Since a HELOC taps into the property’s equity, you must owe less than the current appraised value of your property to qualify. Depending on your lender, you also may need to meet credit score requirements, prove a certain debt-to-income ratio and have a certain percentage of your property paid off.