Home equity loans come in two main types – a standard home equity loan or a home equity line of credit (HELOC). Both are loans that are secured by the equity (cash value) you have in your home. You can use the money you borrow for any purpose you wish.
A HELOC is a line of credit, secured by the equity in your home, which you can draw on as needed. The credit line is set up with a certain limit. HELOCs are usually set up in two phases, a draw period during which you can borrow against the line of credit, and a repayment period during which the loan(s) must be repaid.
Home equity loans and home equity lines of credit can be a smart way to use the home equity you have built up in your home to pay for home improvement, debt consolidation, refinance of a home mortgage, or vehicle purchase.
Use this calculator to help you estimate how much you may be able to borrow against your home equity.