Home Equity Loans are a potentially money-saving option for homeowners who want to consolidate debt and/or turn some of their bad credit into good credit. The possible tax deductions on home equity loans make them potentially useful for debt consolidation, since other personal and consumer loans typically have no tax deductions and higher interest rates. A home equity loan can also be used for home improvement purposes, and certain tax advantages can apply.

No. Although both of these loans are of second mortgages, a HEL and a HELOC have some important differences. With a HEL, you receive a lump sum of money, while a HELOC works more like a line of credit.

The loan-to-value-ratio is the difference between the amount of your current mortgage and the newly appraised value of your home. This ratio will be figured into the loan terms of your second mortgage.

That depends. If you decide to refinance your current mortgage, you may be able to obtain a lower interest rate, which means lower payments, and the possibility of a cash-out refinance.

Depending on the lender, a subordination clause or agreement most often means that before you can get a second mortgage, the first mortgage company must agree to allow the second mortgage to be placed in first lien position. The new loan then has the priority in case of a foreclosure.

Home equity is the part of your home that you own outright. In other words, it is the difference between the appraised value and any outstanding mortgage balances(s). For example, if your home is worth $150,000 and the principal balance remaining on your mortgage is $100,000, then your home equity - the portion of your home that you own - is $50,000.

Business Startups. A Home Equity Loan or Line can provide the much needed and hard-to-get start-up capital for your business. Lower Interest Rates. You can save money with a lower interest rate compared to most credit cards, auto loans, and unsecured lines of credit.

Absolutely! You have worked hard to build equity in your home. Now, put it to work for you, and enjoy the many benefits of a Home Equity Loan or Line of Credit.

A Home Equity Loan provides you with a one-time lump sum cash amount. You repay it as you would any other installment loan in fixed monthly payments. These fixed-rate loans guarantee that your rate will never change and your payment will never increase. Once you get the money, you cannot borrow further from that loan.

According to the current tax laws, interest up to $100,000 of debt, secured by the equity in either your principal residence or second home, is fully deductible. However, there are exceptions to every rule. So, check with your tax advisor.