What is a home equity loan?
A is a type of loan that allows a homeowner to obtain cash loans based on the present value of their property minus the mortgage amount still left to be paid off. Homeowners often apply for home equity loans to pay for expenses such as home remodeling, debt consolidation, college education, and other long-term investments.
A Home Equity Loan provides you with a one-time lump sum cash amount. You repay it as you would any other installment loan in fixed monthly payments. These fixed-rate loans guarantee that your rate will never change and your payment will never increase. Once you get the money, you cannot borrow further from that loan.
A Home Equity Loan, also known as a second mortgage, allows you to borrow a one-time disbursement of funds*, using the equity in your current home or property as collateral. Your interest rate is usually fixed and the loan is amortized over a fixed term. Like a traditional mortgage, you borrow a set amount, you receive the set amount of funds in one disbursement and then you pay that loan back with interest over a set amount of time.
