Home Equity Loan


  • 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.

Also known as an Equity Take Out (ETO).

additional mortgage, secondary debt, two debts


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.
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