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
secondary debt, additional mortgage, 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.
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