I owned a home free and clear but needed some cash so I took out a mortgage and now am unsure how to answer TurboTax questions. Is this loan a mortgage that I refinanced or a Home equity line of credit? and Is there a difference?
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Yes, there is a difference.
For example, using a standard mortgage (like a refinance) you might borrow $150,000, which would be paid out in its entirety at closing. Using a HELOC instead, you receive the lender’s promise to advance you up to $150,000, in an amount and at a time of your choosing. You can draw on the line by writing a check, using a special credit card, or in other ways.
Yes, there is a difference.
For example, using a standard mortgage (like a refinance) you might borrow $150,000, which would be paid out in its entirety at closing. Using a HELOC instead, you receive the lender’s promise to advance you up to $150,000, in an amount and at a time of your choosing. You can draw on the line by writing a check, using a special credit card, or in other ways.
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