Equity Loan
Equity loans are usually a second mortgage, but secured against your home just like a first mortgage. These are also known as "helocs" or "line of credit".
An equity line can be an effective tool to pay down accumulated credit debt, or to free up equity (hence the name) for home improvement projects, or even for college tuition for the kids.
This loan product is usually tied to the prime rate of interest, plus a fixed margin. For example, if the prime rate is 6.00%, and your margin is 1.00%, then your effective interest rate is 7.00%
This is an adjustable rate loan; as the index, usually the prime rate moves, so will your monthly payment.
