Home Equity Loan
A home equity loan (sometimes abbreviated HEL) is a
type of loan in which the borrower uses the equity in their home as
collateral. These loans are sometimes useful to help finance major home
repairs, medical bills or college education. A home equity loan creates
a lien against the borrower's house, and reduces actual home equity.
Home equity loans are most commonly second position liens (second trust
deed), although they can be held in first or, less commonly, third
position. Most home equity loans require good to excellent credit
history, and reasonable loan-to-value and combined loan-to-value ratios.
Home equity loans come in two types, closed end and open end.
Both are usually referred to as second mortgages, because they
are secured against the value of the property, just like a traditional
mortgage. Home equity loans and lines of credit are usually, but not
always, for a shorter term than first mortgages. In the United States,
it is sometimes possible to deduct home equity loan interest on one's
personal income taxes.
There is a specific difference between a home equity loan and a Home
Equity Line of Credit (HELOC). A HELOC is a line of revolving credit
with an adjustable interest rate whereas a home equity loan is a one
time lump-sum loan, often with a fixed interest rate. (text from
Wikipedia)
Home Loan Rates
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Home Equity Sectrets - HELOC
Most people use their HELOC for one thing: a second mortgage. Yet these tools can be used for so much more. Home equity lines of credit are incredible financial tools that can help you on your journey towards financial freedom. With literally two or three simple changes in how you manage your finances, you can begin saving hundreds of dollars in the first month. Find out more.