What is Home Equity Loan?
A home equity loan is a second loan that lets you borrow a lump sum against the equity in your home, repaid at a fixed rate over a set term. It sits behind your primary mortgage as a second lien. It is useful for one-time expenses where you want predictable payments.
Example: A homeowner takes a $50,000 home equity loan at a fixed rate to pay for a major repair, repaying it over 15 years separately from their first mortgage.