Home Equity Loan

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Related to Home Equity Loan: Home Equity Line of Credit

Home Equity Loan

A loan in which the one borrows against the value of one's home. That is, the collateral of a home-equity loan is one's house. The amount in these loans is generally the difference between the homeowner's equity in the house and the market value of the house. The homeowner receives the amount of the loan in a lump sum, and may use it to finance other purchases or ventures. If a home-equity loan is not paid off, the lender may take possession of and sell the house in order to pay for the loan; this can occur even if the homeowner continues to make payments on his/her mortgage. These loans generally have variable interest rates, which are nonetheless still lower than most other lines of credit. Home-equity loans are sometimes called second mortgages or equity loans. See also: Reverse mortgage.

Home equity loan.

A home equity loan, sometimes called a second mortgage, is secured by the equity in your home.

You receive the loan principal, minus fees for arranging the loan, in a lump sum. You then make monthly repayments over the term of the agreement, just as you do with your first, or primary, mortgage.

The interest rates on home equity loans are generally lower than the rates on unsecured loans. However, when you borrow against your equity you run the risk of foreclosure if you default on the loan, even if you have continued to make the required payments on your first mortgage.

Home Equity Loan

Same as Second Mortgage.

References in periodicals archive ?
McBride offers one caution: "You might replace such loans with a home equity loan or larger home mortgage, but if you refinance a mortgage to pay off other types of loans, keep the home mortgage to no more than 80% of the home's value.
As expectations of future home values rise, homeowners are more likely to assume a home equity loan.
Common fees that are charged on a home equity loan include closing costs, points, appraisal fees, escrow fees, flood certification fees, and recording fees.
If so, this regional pattern would be similar to the one that holds for the use of home equty credit: The proportion of mortgage debt holders with a home equity loan in the Northeast is more than twice that pertaining in the South or in the North Central region.
The biggest 'pro' favoring a home equity loan is also the biggest 'con' associated with a refinance loan: Home equity loans have no closing costs, and that can mean a savings of hundreds - even thousands - of dollars compared to a cash-out refinance loan, which typically comes with all the same closing costs as a purchase mortgage.
Another option: an unsecured home equity loan, meaning you don't have.
The specialization of finance companies in the traditional home equity loan market may in part reflect long-time customer relationships as well as limits on the services available from finance companies.
A home equity loan, which is sometimes referred to as a second mortgage, is simply a one-time loan that is secured using the equity in the borrower's home as collateral (equity is the difference between the appraised value of the home and current principal balance of the mortgages on the property).
Without authority for a home equity line of credit and with the restriction that borrowers can get only one home equity loan advance in a 12 month period, Texans must borrow the full amount they project to need for the next year and pay interest on the full amount, even if they don't need it all up front.
NEW YORK, June 3 /PRNewswire/ -- CoreStates Home Equity Loan Trust, 171.
The home equity lien ratio (the home equity loan divided by the total indebtedness) is approximately 59.

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