A home equity loan is a loan where you use your home’s equity as collateral for the loan. This means, that like a mortgage, you are putting up your home as collateral. However, you are specifically putting up the home equity. Home equity is the fair market value of your home minus any liens against the home.      

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A home equity loan is a type of loan where a borrower uses their home as collateral. The actual equity in the home is the collateral. Home equity is the market value of a homeowner’s interest in their real property. In simple terms, home equity is the difference between the home’s fair market value and the outstanding balance of all that is owed on the property. 

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