Home Equity Loan
Home Equity Line of Credit (HELOC)
Equity can be defined as the difference between what your house is worth in today's market, and how much you currently owe for the property. For example, if your home is appraised at $225,000 and you have an outstanding balance of $75,000, then you have $150,000 of home equity.
With this in mind, a Home Equity Loan is basically a line of credit secured by a second mortgage on a property. You can borrow against what you have already paid, so long as you don't exceed the maximum loan amount previously agreed to by you and the lender.