Home equity loans and home equity lines of credit (HELOCs) are a common way of financing a new pool. With both, you’re able to draw upon the equity of your house. However, there are some key distinctions between these two types of financing options.
A home equity loan, or “second mortgage” offers fixed interest rates over a fixed loan term. A HELOC works similar to a credit card, where you’re offered a line of credit based on the value of your home and are able to draw upon it as needed, for the length of the loan term. HELOC interest rates are typically variable rather than fixed, making it more difficult to predict what exactly you’ll owe.