Home Equity in Relation to Home Loans

What is home equity?

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Home equity is value built up from paying down the mortgage of a home while it appreciates in price. It is the difference between the market price of a home and the debt attached to it, like a mortgage. Home equity is the portion of your home that you actually own.

Home equity can be used to secure a loan. It can either be a home equity loan or a home equity line of credit. A home equity loan is characterized by a fixed term and a fixed interest rate on a single lump sum. A home equity line of credit is a fund from which you can draw from multiple times and has a variable interest rate. Home equity loans have low rates because they are secured by the property.

If you'd like to learn more about home equity loans, just fill out the form below and a friendly home.loans specialist will get in touch.