Advantage is that you can pull this 100k as needed. If, for example, you make a $0.00 initial withdrawal, you have $100,000 in loan pending to be drawn, bound to your own funds. Then you could pull $5.00 to buy lunches, $500 to buy a barbeque, or even $50,000 to buy the ship I always wanted.
In this case, your repayments are determined by the amount taken up and the interest rat. It will almost always be a single interest point calculated on the basis of the premise interest level (8.25% for this example) plus or minus a setgin. With other words, if your spread is primes + .75. and you lend 100,000. then your pay would be:
HELOAN is the same except you can't pull on it. It is a one-time transaction, usually a static interest payment, and basically it is similar to a first hypothec. And the only true distinction is that the interest rates for home equities are generally higher. A few individuals have started to relate to HELOC and HELOAN exchangeably.
When it is a circumstance in which it makes a real distinction for you, such as someone speaking about a mortgage for which you are eligible, it would be up to you to resolve it. As a rule, a HELOAN offers lower interest rate fixes, while a HELOC offers the option of being used as a line of credit, but is a floating rate.
HELOC is an integrated part of many Mortgage Acceleration tools. After all, you should be clear about the fact that many HELOCS provide the opportunity to pull a part of the available credit and "block" it to turn that part of the cash into a HELOAN.