Equity Loans – Home Equity Loans Equity loan is loan in which the borrower uses equity in something that they own as a security (collateral) for the loan. For example a home equity loan is a loan secured by your personal home. In general anything of value owned by the borrower can be used as collateral for equity loan – a vehicle, agricultural land, buildings, rental real estate, personal house (home equity loan) etc. Home Equity Loans The most common type of equity loan is the home equity loan. A home equity loan is a loan in which the collateral is a home you own. For example if you own a house worth $500,000 and you have 20% ($100,000) equity in the house, you can apply for home equity loan and use the 20% you actually own as a security for the loan. Getting a home equity loan, effectively decrease the equity you have in your house and places a lien against the property, that's why the home equity loans are also know as second mortgage. Where to Get Home Equity Loan? You can get a home equity loan from almost any major Canadian financial institution if you are Canadian, or US bank if you are US citizen. With the North American real estate boom in the last few years and the all-time low home equity loan interest rates, the home equity loan market has become very competitive, so find current home equity loan information in order to choose the best home equity loan. Home Equity Loan Refinancing Home equity loan refinancing is essentially paying off your mortgage with the cash from a new home loan, which uses the same real estate property as security for the loan (another example of collateral is the deposit of a secured credit card). When interest rates are falling down, you might be able to arrange a home equity loan refinancing, which will lower your mortgage carrying cost as a result. Home Equity Loan Types Home equity loans can be open ended or close ended. The borrower gets a lump sum with the close end home equity loan and it's not possible to borrow further. The close end loans are usually for shorter periods than the original mortgage and have fixed interest rates. The open end home equity loan is like a line of credit (frequently called home equity line of credit), and the borrower can borrow up to a certain credit limit. This type of home equity loan are available for longer periods of time compared to the close end, and the interest rate is tied to the prime interest rate. Home Equity Loan Fees Home equity loans can have many fees associated with them, like closing fees, appraisal fees, title fees, stamp duties, etc. These equity loan fees can be paid upfront or can be lumped into the loan itself. Home Equity Loan Calculators Home equity loan calculators are nifty online tools, which can help you estimate the cost of your equity loan and your loan payments. Equity loan calculators and mortgage calculators are usually free to use and are a great place to start if you are considering getting a home equity loan.