Answer: That depends on what you mean by "home equity account."
The article by Liz Weston, published on OregonLive, discusses the differences between Home Equity Lines of Credit (HELOCs) and home equity loans. A HELOC functions like a credit card, offering a revolving line of credit with variable interest rates, allowing homeowners to borrow funds as needed up to a limit, repay, and borrow again during the draw period. Conversely, a home equity loan provides a lump sum payment with a fixed interest rate, which must be repaid over a set term, similar to a second mortgage. The choice between the two depends on the homeowner's needs: HELOCs are suitable for ongoing or unpredictable expenses due to their flexibility, while home equity loans are better for one-time, large expenses where predictable payments are preferred. Both options use the home as collateral, thus carrying the risk of foreclosure if payments are not met. The article also touches on considerations like interest rates, repayment terms, and the potential tax deductibility of interest paid on these loans.
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