If you have major home improvement projects on your mind, you may wonder what the best way to get funding for them might be. Not everyone has several thousand dollars in the bank that they can just put toward their projects. If you want to get the funds you need without hassle or too much risk, you could instead try taking out a home equity loan.
Home equity loans are generally offered by the same lenders that offer mortgage loans, and in a way, they function very similarly to mortgages.
In the video posted on this page, the host describes a home equity loan as a kind of second mortgage you can place on your home. These loans use the equity you have put into your home by paying for your first mortgage as collateral. This means that if you default on your home equity loan, your house is on the line, just like it would be if you default on your mortgage.
Home equity loans allow you to leverage the money you have spent investing in homeownership toward achieving your goals. If your home needs significant repairs or you’re planning on selling and want to ensure you get the best possible price, taking out a home equity loan could give you a great start.