Financial Definition of home equity loan
A house equity loan (HEL), also known as a 2nd home loan, is that loan guaranteed by the equity in a home. Equity equals the worthiness of this homely household less the total amount owed regarding the homeowner’s mortgage.
Home equity loans can be utilized to fund major costs, such as for example medical bills, house remodeling or an university training.
House equity loans are incredibly comparable in concept to conventional mortgages. For example, house equity loans generally speaking should be paid back over a period that is fixed. Some lenders may provide fixed rates on these loans, others might provide adjustable prices.
Like mortgages, many loan providers will even charge points as well as other costs for creating the mortgage, and these prices differ by loan provider. (more…)