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Definitions of Home Equity Loan

see also HELOC which is an acronym short for Home Equity Line of Credit. These are loans which are secondary to the first mortgage on a property and may cause problems with closing a sale, because like the first mortgage, they are due on the sale of the home. This definition of Home Equity Loan contributed by Eric Blackwell.
A home equity loan could either be a mortgage or a line of credit. They both lien against the equity in a home. Most often a home equity loan refers to a fixed interest loan with an original balance which is delivered to the borrower less expenses at the loan closing. In essence it's a mortgage not a line of credit. It could be a first second rnor third mortgage (good luck on that one). Any one attempting to get a home equity loan must hold the deed. If you are the payee on a contract for deed you in essence have no home equity until the contract is paid off, because you don't hold the deed..