What is a home equity-interest only loan?
First of all, a home equity loan is a type of loan in which the borrower uses the value of their house as a guarantee that the money will be paid back (this is called collateral). An interest only loan is a loan in which for a set period of time the borrower only makes payments on the interest, paying that off, leaving the rest of the loan (the principal) to pay off with no more interest adding up. So, to answer your question; a home equity-interest only loan is the combination of borrowing money using your house as collateral, and then paying back the loan interest first followed by the principal.
