Mortgage Lending Library
Scattered amongst the sea of mortgage and real estate jargon are the words “home equity.” To begin, home equity is the market value of a home minus the mortgage's balance. In essence, it is the different between the current market value of your home and how much you owe on its mortgage balance now. Therefore, people who have paid off a considerable amount off their balance have more home equity and are at an advantage.
A home equity loan is a type of mortgage loan that lets you borrow money on the condition you use home equity as collateral. This is a type of second mortgage that converts equity into cash, which can be taken out of the bank to spend on other expenses. Many people like to take out home equity loans for the purpose of high education, paying off debt, settling their debt condition bills, or financing an expensive trip.
Home equity loans are simple. By borrowing money “against your home's equity” you promise to repay it back over a period of time just like a regular loan. Usually these types of loans require a fee plus closing costs to be paid upon issuance. Before taking out a home equity loan, know what you're getting into. Many lenders are scam artists who charge outrageous rates to unsuspecting consumers looking for extra cash. Signing off on a home equity loan doesn't necessarily mean you are locked into it. Most lenders offer a 3 day to 1 week period for borrowers to change their minds.
Take advantage of your home equity today to rebuild that backyard or put money away for tuition. You'll be glad you did