Home equity debt

Home » Web Guides » Finance » Mortgages

In This Guide

Most Popular

Mortgages: Home Loans on the Web

Buying a first home is an important milestone in anyone's life. But even if it's your fifth home purchase, the financial jargon and seemingly endless paperwork involved in getting a mortgage can overshadow the excitement of owning your new home. On the Web you'll be able to find resources that help you understand what a mortgage is and how it works; decide which type of mortgage works best for you; find a reputable lender; and even understand what happens after you get your loan. For a Spanish-language version of the Guide, click here.

Expand All Guide Sections

How does a mortgage work?

It would be nice if getting a mortgage were as simple as asking for one and then getting a check in ... read more »

Choosing the right type of mortgage

Choosing the right type of mortgage can be as important as choosing the right home. Instead of ... read more »

Applying for a home loan

Once you have found your dream home you want to be able to move in as quickly as possible; ... read more »

After mortgage approval: switching lenders, foreclosure, and tax breaks

Once you cross all those t's and dot the i's on your mortgage paperwork, you can finally enjoy your ... read more »

Home equity debt

You can't always plan for your future financial needs. One way to readily access credit is to use the equity in your home to get a loan or a line of credit. There are a number of ways to use your home equity for immediate financial liquidity; take a look at the following sites to help you determine if home equity debt is your best option for additional funds.

Dulcinea's Insight

Home equity refers to the value of your house, minus any outstanding debt. For example, if you bought your house for $100,000 and after 10 years still owed $50,000 on your mortgage but your house now had a value of $150,000, you would have $100,000 in equity ($150,000 value - $50,000 owed = $100,000 equity). Lenders will usually allow you to borrow up to 80 percent of your home's value.

Most banks and mortgage lenders offer home equity loans; you should be able to find out if your lender offers this kind of loan by checking its Web site. Be aware of termonology such as, HELOC, which is a common abbreviation for "home equity line of credit."

Before applying for any home equity loan or line of credit through an online lender, make sure to check its credibility through an organization that oversees fair lending practices. (There is a list of these in the "Applying for a home loan" section of this guide.) Home equity debt is accrued when you use the equity that you've earned on your house as collateral to get a line of credit or a loan.

Dulcinea's Picks

For information about a home equity loan ...

Bankrate has a home equity section that provides you with almost anything you could want to know about home equity loans or home equity lines of credit. Especially helpful for beginners is the "Home Equity Basics" section that takes you through what home equity is, how to apply for a loan or line of credit, and things to watch out for. Check out the home equity loan versus home equity line of credit calculator to help you determine which one is right for you.

go to site »

eHow has a "How to Get a Second Mortgage on Your Home" article that gives you a very quick overview of the necessary steps involved in taking out a home equity loan. At the bottom of the article you'll find tips and warnings to consider when looking at this type of loan.

go to site »

For information about a home equity line of credit ...

The Federal Reserve Board has a consumer handbook about home equity lines of credit. This guide includes information such as what to look for in a home equity plan, the costs associated with a home equity line of credit, repayment options, and a comparison of a line of credit versus a second mortgage.

go to site »