18th Nov 2009 by JonB
An equity loan is simply a loan that is secured by the equity in your house. Technically speaking, every mortgage is an equity loan, but the term is typically used to describe loans based on equity acquired while you've been living in the house. Whether through increasing market values, or simply paying off an old mortgage. many times, equity loans are in second or even third position behind a larger mortgage. For example, if your house is worth $200,000 and you have a mortgage for $100,000 you have $100,000 in equity in your home. You may then get a 2nd equity loan for some percentage of the remaining equity in your home.
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