Home equity loans are loans secured by a home’s equity, the difference between the home’s market value and the amount owed on the mortgage. For instance, if a home is worth $200,000 and the mortgage balance is $100,000, the homeowner has $100,000 in equity.
Home equity loans are popular because they offer low interest rates and flexible repayment options. They can be used for a variety of purposes, such as home improvements, debt consolidation, or education expenses. Historically, home equity loans have been an important source of financing for homeowners, particularly during periods of economic downturn.
