What are the types of home equity loans?
There are two types of home equity loans: a standard home equity loan (also called a term loan, a closed-end loan or a second mortgage installment loan) and a home equity line of credit. A standard home equity loan is a like a traditional loan in which you are loaned a lump sum of money and you pay that money off in fixed payments at a fixed interest rate over the life of the loan. More on standard home equity loans. A home equity line of credit works like any other line of credit but this one is secured by your home. You have a maximum amount you can borrow. The interest rate is variable and you pay interest on only the amount borrowed. You credit is revolving which means that as you pay off borrowed money, you can borrow that money once again. More on home equity lines of credit.
There are two types of home equity loans. A standard home equity loan (also called a term loan, a closed-end loan or a second mortgage installment loan) and a home equity line of credit. A standard home equity loan is a like a traditional loan in which you are loaned a lump sum of money and you pay that money off in fixed payments at a fixed interest rate over the duration of the loan. A home equity line of credit works like any other line of credit but this one is secured by your home. You have a maximum amount you can borrow. The interest rate is variable and you pay interest on only the amount that you borrow. You credit is revolving which means that as you pay off borrowed money, you can borrow that money once more.
