What Exactly Is A Home Equity Loan?

Where can you turn if you need extra cash unexpectedly? After covering 401(k) loans and credit cards the last two weeks, now we’re talking home equity loans.

This option is only open to people who own a home, but even if that’s not you yet, it’s good to know how it works. Let’s say you own a home worth $250,000 and you still owe $150,000 on the mortgage. That means you have $100,000 in equity in the home. A home equity loan let’s you borrow against that equity; a lender gives you a loan using the equity you have in your current home as collateral. The rates are usually lower than personal loans but they aren’t without risks. There are different types of home equity loans and the details really matter so read the full article here to get the whole picture.