Home Equity Loan
Definition
- A loan that can replace or be added to the first mortgage. This type of loan is generally used when a home owner wants to make renovations to the property.
Notes
Also known as an Equity Take Out (ETO).
Synonyms
additional mortgage, secondary debt, two debts
Acronyms
HEL
Related Terms and Acronyms
- Cash Out Refinance — Definition,
- The taking out of a new mortgage on the same property in which the amount borrowed is greater than the amount of the previous mortgage. The difference is taken out in cash.
- Equity — Definition,
- Ownership in an asset.
- The value of a property minus outstanding mortgage debt and other liens.
- Home Equity (HE) — Acronym, Very Important,
- The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.
- Home Equity Debt — Definition,
- Debt secured by your home.
- Home Improvement Loan (HIL) — Acronym, Important,
- Home Loan — Definition,
- A loan used to buy a home is referred to as a "mortgage."
- Junior Mortgage — Definition,
- A loan that is subsequent to the claims of the holder of a prior (senior) mortgage.
- Mortgage (mtg) — Abbreviation, Important,
- A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- Mortgage Application — Definition, Very Important,
- A document in which a prospective borrower details his or her financial situation to qualify for a loan.
- Second Mortgage — Definition, Important,
- A mortgage which ranks after a first mortgage in priority on a registered land title.
- Subordinate Loan — Definition,
- A mortgage whose priority is below that of another mortgage; i.e., a second or third mortgage or a home-equity loan.
- Tandem Loan — Definition,
- When one asset, usually a house, has two loans taken out on it.
