What is a home equity loan?

A home equity loan is a loan taken out against the equity in a home. Equity is the difference between the home’s market value and the amount of debt you owe on it. Home equity loans are available to homeowners in North Carolina who have accrued equity in their homes. Home equity loans are a type of secured loan. That means that you must pledge your home as collateral to use a home equity loan—if you are unable to make payments, the lender has the right to repossess your home. Home equity loans also require a credit check, as well as an appraisal of the home. Home equity loans are typically taken out for home renovations, debt consolidation, or other large purchases. Home equity loans usually have a fixed interest rate. This means the payments won’t change over the life of the loan. In North Carolina, lenders are required by law to provide borrowers with written disclosures about the loan terms and conditions. This includes the APR (annual percentage rate), the total cost of the loan, and any prepayment penalties that may apply. It’s important to remember that taking out a home equity loan means putting your home at risk. Make sure to consider all of the risks and benefits before deciding if a home equity loan is right for you.

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What is a home equity loan?

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