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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.

amny asked: "I am thinking of refinancing and Chase Bank is ready to give a 10 yr 170k home equity loan. Is this a better than my existing home mortgage loan. Is there anyone who has suggestions for this."

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Daniel G replied: "Typically home equity loans have variable interest rates ... the very same type of rate programs that a causing the havoc in the current banking and real estate market. If your rate is fixed for the term, you will have predictable payment streams that you can budget for. If the rates are variable, and the underlying market rate goes up again, you may be asking for trouble. Try to get low fixed rates that you can pay off as quickly as possible. Having your largest asset at risk in case you experience job loss or other financial loss really sucks ... believe me, I speak from experience."

fluke_skywrecker replied: "My wife and I took out all the equity of our paid for home. At first the interest was only 3.25%. Over a couple of years it inched its way up to 8%. We finally 'got lucky' and locked in a fixed at 6%. I say lucky because if you search for historical interest rate history you could be in for shock.I now use my home equity line of credit to buy a few houses cheaper because it's a cash deal. Then we refinance if possible to get as low a fixed rate as possible.Debt in general is the Devil's Way to make sure 'The Poor you have with you always'. But if you can plan it so you make MORE money off of other people's money (ie, the bank's money) -- i say if you make more money than you are paying out in interest, then you are a capitalist! Beware of interest rates climbing out or your reach.Good luck."

jazzfan replied: "Good answers so far.First, avoid a variable interest rate. For almost the same APR you can get a fixed rate and not worry if rates go up.Second, think hard about an equity line. Many people have gotten into trouble with these because they lack discipline and treat it as a source of 'free money'. They end up in even more debt. I'd suggest you determine how much you need and only borrow that amount, or if you do get a credit line, pretend that's all that's available. You'll still have the rest for an emergency. Third, the interest rate on a home-secured loan is usually lower than any credit card. Using that equity line to pay down your credit cards is very tempting due to the lower rate. If you do this, keep your payment amount the same. It doesn't make sense to amortize a 3-year revolving line of credit over 10 or 15 years in a home equity loan even if the interest rate is lower. If you keep your overall payment amount the same as now (all credit cards + 2nd mortgage/home equity credit line), you'll retire the debt faster which is a good idea.Whether you get a 2nd mortgage or a home equity line, keep your paid-off credit cards in a box instead of canceling them. You still have them if you have an emergency (such as losing or changing jobs or high medical bills) but don't take them out to buy a new tv or something similar. Also, even if you have great credit if all your existing accounts are maxed out or nearly maxed, your overall credit rating suffers. It's better to keep a couple of zero-balance credit cards for this reason, too.Finally, read the fine print carefully. What happens if you're late with a single payment? You APR may double. Read the other terms and think about a worst-case scenario and how that would effect the loan."

DONALD S replied: "Great website, resourceful,user-friendly should be able to answer your questions.http://loan.goodhelper.info/calculate-car-loan-payment.html"

Lucia replied: "All mortgage loans are not created equal. If you are looking for a loan, you have probably discovered the array of loan types and options. It can be confusing forthe first-time borrower and are easier to qualify for than conventional loans. They are also guaranteed to the lender, which allows the borrower to obtain more favorable loan terms."

sara sentor replied: "Home equity loans make a great option for refinancing, but there are some important factors that should be taken into consideration, before taking any decision. Generally speaking, there are 2 types of lenders offering home equity loans. One that offer you loan with low cost refinance & other which give 'no cost' refinance home equity loans to the borrower. When ready to take the crucial decision, have thorough research about your lender and the offer you are getting. Take extra care to check, you are not being ask to pay higher rate of interest or additional fee. A rare edge that home equity loans get against other loans is that you don't need to pay cash by closing costs on your loans. For more on refinancing mortgage: "

Paul D asked: "My wife earns more money than me. The home loan is in her name but the home title is in our joint names. Can she take a home equity loan without my consent?"

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Hottiez asked: "My husband and I are looking into a home equity loan or refinancing our existing home loan. We own a doublewide on 4 1/2 acres that has been converted to real property.Which is better? A home equity loan, or refinance our existing loan? Where do we start? What should we know? And what we should be careful of?"

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brandonbroker replied: "If you have a great rate on the first then leave it. It also depends on the size of your HEloan. Ask your broker or bank to compare the two and see what's in your best interest. A HELOC is very easy depending on your credit. If the credit is good then you should expect a no closing cost loan at about 5%You can email with any other questions"

PAUL R replied: "You should go for a proper program with an expert's help for a better management. Check out here for some useful info and tips.http://homeloan.online-assistant.info/no-fee-home-equity-loan.html"

C J asked: "I have an offer from a credit card co with a low interest rate, 2% lower than my home equity loan interest. I would love to get rid of the horrible 8.75% home loan interest on $12,000. What to do?"

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Sharon T replied: "How long is that credit card rate good for? Bet it is less than a year. What are you going to do at the end of that time? Trouble ahead!!!!!!!!!!Why don't you look for a better home equity loan rate? In fact, you may be able to get the current lender to lower the rate with no cost. Contact them, tell them you are going to refinance the loan but want to give them the opportunity to keep your business at a lower rate.I've done this twice before so it can happen."

bug2quilt replied: "If your home equity loan can be paid without penalty (check out the terms of your loan), you can pay it off with your credit card. However, you need to read the fine print of your credit card offer to know if there are restrictions as to what type of loans you can pay off and still qualify for the low interest rate. Also, if it's a new credit card offer you have to see if you can qualify for a $12,000 line of credit. There are so many variables, you really need to just read the fine print of the cc offer and call them with questions."

donfletcheryh replied: "The question has to depend on the contract for your home equity loan. You can get a convenience check from the credit card people to pay the equity loan if you have the right to pay it off. Some loans are for the whole period else you pay a penalty. When interest rates have gone down, many lenders will not be happy to let you pay off if your contract does not provide for that.But beware. a sudden increase in the amount you have on your credit card can trigger an interest rate increase. Confirm that this will not be done before you do it."

Koki M replied: "Unless you can eliminate the 12 grand debt in 6 months you will be paying interest... Credit card might not be your best option in this case... try a credit union, which are known for offering better rates than average banks"

Shala Rose replied: "HiI saw your question I have decided to help people out due to the fact that I myself has been scammed twice by fake lenders in my search for a loan but at last I got a reliable lender that gave me the loan($60,000 USD) that I was in dire need of even with a bad credit. Hence I decided that I will refer anybody I come across to this God sent lender he is reliable and his terms are fair. You can get to him via his email address"

stephanie b asked: "we are buying a home from my mother. she is gifting us the equity in the home. can we get an equity loan at the same time as we get our home loan or do we have to wait and how long?"

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Gatsby216 replied: "Don't do it. Ramping up the debt on a house you just aquired is a big mistake. I would make sure you can handle the actual costs. I know there are all these "great" reasons to go into more debt, but in fact we all know that is just us kidding oursleves with the help of lenders and the bad advice of other friends and relatives who have too much debt. Technially if your credit is OK you could probably get a loan as soon as the paperwork is all completed. Good luck"

Marty S replied: "You should be able to. Shoot me an email to, and I'll help.Marty"

Home Loan Guru replied: "The short answer to your question is yes - you should be able to get a home equity loan as long as you do not mortgage more than the appraised value of your home. There are are factors that determine your ability to get a home equity loan (credit, income, financial history, etc.), so I recommend talking to a trusted mortgage professional. Get referrals from friends and family for a mortgage company they've worked with. Once you have a full analysis done, you can get a good idea of what you'll qualify for.However, be careful about taking on more debt than you can handle. You may want to get the house, see how the bills work out and how many expenses you have and then look into getting a loan. If you know for sure that you'll have no problems handling the debt and you need the money, you should be able to get the loan.Rules for home equity loans at the time of purchase have changed recently because of problems with foreclosures and subprime loan defaults. Your mortgage professional will go over all of this with you.Good luck with your new home."

A second mortgage is basically a loan that you take against the equity that you have already built into your home. The proceeds from the second mortgage can generally be used for whatever purpose the borrower has in mind. It can be used to pay off a car loan or credit cards. The proceeds can be used for home improvement or to take a vacation

Second mortgage loan- second mortgage loan is offered against equity of the home. Basically an additional mortgage to your home, you can get up to 80 percent of the appraised value of your home in case of a second mortgage home loan for improvement.

nice post about how to choose a mortgage loan company

Regardless of the loan type you are applying for, you can get a boost on your approval rate if you are a homeowner. Homeowners have better chances of getting approved for home loans, home equity loans but also for unsecured personal loans, student loans, car loans, business loans and many other loan types.

If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans......more

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