Popular Questions
What is a home equity loan?
A home equity loan is a type of loan in which the borrower uses the equity of the home as collateral. The loan amount is dictated by the value of the property. Home equity loans are often used to finance major expenses such a home repairs, or other expenses.
What are the two types of home equity loans?
Home equity loans come in two types: A traditional home equity loan (closed end) and a home equity line of credit (open end). Both are referred to as second mortgages because they are secured against the value of the property, just like a traditional mortgage. They may provide access to large amounts of money and may be easier to qualify for than other types of personal loans because they are secured by your house.
What do I need to qualify for a Home Equity Loan?
Most Home Equity loans require good credit history and reasonable home loan-to-value ratios. As with most loans, your income must be verified and your income along with other liabilities will be taken into account to determine your ability to repay the loan in full.
What can I use the home equity funds for?
You can use a home equity loan for anything you want. However, borrowers usually use second mortgages for some of life’s larger expenses because homes may to have a lot of value to borrow against. Several popular uses include:
- Remodel, renovate, or otherwise improve the house and property
- Consolidate high-interest debts