What a Home Equity Loan Is and How It Works

This video from Chris Peach from explain what a home equity loan is and how it works. If you need to raise some cash, you may not have to look any further than your home. You can use this type of loan for an upcoming big expense like a wedding, or to remodel your home, or to consolidate your debt.

Many people confuse a home equity line of credit with a home equity loan but they are not the same. A home equity loan is a lump sum loan that you receive that is guaranteed by the equity in your home.

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You can borrow up to 90% of the equity of your home depending on the lending. Sometimes that percentage is lower and the home equity loan service will only allow you to borrow against 75% of the equity in your home.

The video talks about the advantages that a home equity loan has to offer. For example, the interest rate can be a lot lower for a home equity loan than it is on a personal loan because your home is the security behind the loan. There is a lot of expert information that this short video covers.