Do you need to tap into your home’s equity to pay for  a home remodeling project (don't, go to the construction loan page), or to pay off high credit card debt, create a financial planning strategy? A home equity loan is a fixed or an interest only adjustable rate loan that is secured by the equity in your home. With a home equity loan, you borrow a lump sum of money to be paid back monthly over a set time frame, much like your first mortgage. The terms home equity loan and second mortgage are often used interchangeably for either a purchase (eliminating PMI) and or for a refinance purpose.

The process for a home equity loan is similar to your first mortgage. The closing costs are usually lower. The interest rate varies as a HELOC it is usually tied to Prime Rate plus the margin. The fixed rates give you the stability of one constant monthly payment. The interest paid is tax deductible.