Home equity loan
A one-time lump-sum loan secured by your home's equity, usually with a fixed rate and fixed payments. It is a second lien that stays separate from your first mortgage.
Also called: second mortgage, HEL
Related terms
A revolving credit line secured by your home, which you can draw on and repay as needed. Rates are usually variable, and it typically sits behind the first mortgage as a second lien.
The part of a property's value you own outright: its market value minus what you owe on loans against it. Equity grows as you pay down the loan and as the property gains value.
A refinance where the new loan is larger than what you owe, and you receive the difference in cash. It turns home equity into money but raises your balance and resets the loan.
A legal claim against a property that secures a debt, such as a mortgage, unpaid taxes or contractor bills. Liens generally must be paid off or released before the property can be sold with clear title.
A mortgage whose interest rate stays the same for the life of the loan, so principal and interest payments never change. Taxes and insurance in the payment can still go up.