Home Equity Loans

Use Your Home to Get Cash Out or Consolidate Debt

Simply put, home equity loans are loans in which a person uses the equity in his home as collateral. If you get a home equity loan, you are borrowing against the accrued equity that your home currently has.

A home equity loan is basically the same thing as a second mortgage. It is a new loan which requires separate monthly payments. Qualification requirements for home equity loans often include good payment history on your first mortgage, a decent credit profile for the applicant, and a reasonable loan to value ratio on the home.

Standard Equity Loans vs. HELOC

Standard home equity loans release funds to the borrower in one lump sum, after which regular monthly payments are made to repay the loan. Another type of home equity loan is the home equity line of credit, or HELOC. The HELOC is almost exactly the same as a normal equity loan, except the funds are made available in a revolving account. The pre-established line of credit is available for use when you need it, and you only make payments when you draw from it.

Some of the top reasons that people get home equity loans are:

Debt consolidation - roll high interest debt like credit cards into one loan with a lower interest rate and one easier payment

Home improvements - home renovations or redecorating can be a costly but beneficial investment

Travel/vacation - take the trip of a lifetime without having to wait until retirement

Begin the Quote Process

Select Your Country

Enter Zip Code

Home Buying Vocabulary

Equal Credit Opportunity Act (ECOA)

Is a federal law that requires lenders and other creditors to make credit equally available without prejudice based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

See all Vocabulary

Frequently Asked Question

Can I get extra cash out when I refinance?

Answer:
Yes. Most lenders offer some type of cash-out refinance, which involves refinancing for the amount owed on the old loan plus rolling in some of the equity.

See all FAQs