What is a home equity loan?

A home equity loan is a loan that uses the equity in your home as collateral. Equity is the difference between the market value of your home and the amount you still owe on it. For example, if your home is worth $200,000 and you owe $150,000 on the mortgage, you would have $50,000 in equity. With a home equity loan, you can borrow against this equity to pay for things like home improvements, a car, or college tuition. In Washington, home equity loans are regulated by the state’s mortgage law. This means lenders must disclose key information to borrowers such as the loan’s interest rate, repayment terms, and total cost. Borrowers also have certain protections under Washington law, such as the right to cancel a loan for any reason within three business days of signing the loan agreement. While home equity loans can be a great way to get access to the cash you need, it’s important to remember that they have risks. Because your home is the collateral for the loan, if you do not make your payments, you could lose your home. That’s why it’s important to understand the risks involved and make sure you can afford the payments before taking out a home equity loan.

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What is a home equity loan?

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