What is a home equity loan?
A home equity loan allows you to tap into your home's equity, which is the difference between the amount your home is worth and the amount that you still owe.
Homeowners often use a home equity loan for home improvements, to pay for a new car, or to finance their child's college education.
Because the loan is secured by your home’s equity, if you default, the bank may foreclose on your house and take ownership of it.
This type of loan is sometimes referred to as a second mortgage or borrowing against your home.
Refer to 12 CFR 1026 "Truth in Lending (Regulation Z)."
Last Reviewed: October 2020
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