A home equity loan is a loan for a fixed amount of money that is secured by your home. You repay the loan with equal monthly payments over a fixed term, just like your original mortgage. If you don’t repay the loan as agreed, your lender can foreclose on your home.

Is home equity a loan?

A home equity loan is a type of loan that enables you to use the equity you’ve built in your home as collateral to borrow money. … Home equity loans are often called second mortgages because you have another loan payment to make on top of your primary mortgage.

Can I take money out of my house equity?

You can take equity out of your home in a few ways. They include home equity loans, home equity lines of credit (HELOCs) and cash-out refinances, each of which have benefits and drawbacks. Home equity loan: This is a second mortgage for a fixed amount, at a fixed interest rate, to be repaid over a set period.