What Is a Home Equity Loan?

Home Equity Loan Meaning

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Home Equity Loan Definition

A home equity loan is a type of loan that allows homeowners to borrow money against the equity they have in their home. It's essentially a second mortgage where the loan is secured by the homeowner's property. In other words, the home serves as the collateral. This means the lender can foreclose on the home if the loan isn't repaid.

Home equity loans provide a single lump sum payment to the borrower and generally have a fixed interest rate. The loan is repaid over a set period of time, typically between 5 and 30 years. Homeowners can use the funds for various expenses like home renovations or debt consolidation.

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Home Equity Loan Definition Author

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Kristina Morales

Real Estate Contributor

Kristina Morales is the Real Estate Contributor at Loanfully, an online educational resource for borrowers and industry professionals. Kristina is both a licensed mortgage loan originator and real estate agent in the State of Ohio. Inspired by her years of working with buyers and sellers and seeing a need for more consumer education, Kristina created loanfully.com. In addition to real estate sales and mortgage lending, Kristina had an extensive corporate career in banking, treasury and corporate finance. She ended her corporate career as an Assistant Treasurer at a publicly traded oil & gas company in Houston, TX. Kristina obtained her MBA from the Weatherhead School of Management at Case Western Reserve University and her B.A in Business Management from Ursuline College.

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