Imagine your house is like a giant piggy bank! A home equity loan lets you borrow money using the value of your house. It's like getting a second loan, but you use your house as security. This means if you can't pay back the loan, the lender might take your house.
- You borrow money against the value of your home.
- It's a second loan; you still have your first mortgage.
- Lenders check your credit score and income to see if you can repay.
| Factor | Explanation |
|---|---|
| Home Value | How much your house is worth. |
| LTV (Loan-to-Value) | How much you owe compared to your home's value. |
| CLTV (Combined LTV) | LTV plus any other loans on your house. Most lenders let this be as high as 85%. |
| Minimum Loan | Varies by lender; some start at $10,000, others at $45,000. |
| Example Payment | A $100,000 loan at 8.5% interest for 30 years costs about $769/month. |
