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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

Home Equity Loan

Same as Second Mortgage.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The refinancing lender's loan would be recorded after the home-equity loan. Assuming the situation above occurred after the refinance, and no subrogation was agreed upon, the home-equity lender would be paid in full and the refinancing lender would receive what was left, which would be less than if they were in a first position.
Thanks to home-equity recovery across the country and the prospect of increasing interest rates in the near future, home-equity loans and home-equity lines of credit (HELOCs) are expected to experience a surge in demand on a scale not seen since, according to New York-based Fitch Ratings, new equity line originations peaked from 2004 to 2005.
Example 1: H takes out a home-equity loan for $50,000.
Home-equity loans or lines of credit are logical products to promote to new mortgage holders.
ACCORDING TO THE FEDERAL RESERVE Flow of Funds report in March of this year, outstanding home-equity loans amounted to more than $1 trillion in 2003.
THE TEXAS LEGISLATURE HAS PASSED REFORMS to make home-equity loans more flexible, affordable and advantageous for Texas consumers.
Fifty percent of customers who got a mortgage from a National City Bank loan originator in 2000 also purchased a home-equity loan at the same time.
For mortgage-related ABS in January GMAC-RFC issued $1.9 billion in residential subprime mortgage securities through the company's RASC shelf (KS series); $800 million A-quality home-equity loan securitizations, including high loan-to-value (HLTV), off its RFMSII shelf (HS and HI series); and $392 million of program exception product off its RAMP shelf (RS series).
Since November, First CU has beefed up applications for auto loans, personal loans, home loans, home-equity loans and business loans through the promotion.
Schroder, Kurtz and Young assist clients with a wide range of residential loans, including purchases, new construction, FHA and VA loans, refinances and home-equity loans.
According to Bloomberg, Bank of America Corp (NYSE: BAC) has said that it is expecting bigger losses on home-equity loans than what it had previously estimated.