Resources - Mortgages

The loans generally referred to as equity loans are junior loans or second mortgages. These loans usually have adjustable interest rates, are secured by the borrower's equity in the property, and are amortized over fixed periods of time.

A popular type of junior or secondary loan provided by on-line lenders is a home equity line of credit. This line of credit is an extension of open credit up to certain agreed limits, secured by a second mortgage on the home. The borrower simply writes checks against the credit line and pays interest on only that amount of credit actually used. Security is provided by the owner's equity in the property. You will usually pay higher rates on your home equity line of credit because of the secondary position to your other home mortgages.

If you are looking to improve your home, you can save money by taking out a home equity line of credit, rather than a home equity loan. You will save interest payments by paying for your home improvement expenses as they occur rather than receiving all of your improvement funds at the beginning of your home improvement project.