This type of loan is called a home equity loan and includes several different styles of loans, such as revolving credit loans (called Home Equity Lines of Credit or HELOCs) and reverse mortgages. Whether you can access these types of loans depends on how much equity you have in your home.
If you find yourself in need of a large amount of money for things like kitchen renovations or a new car, your options are typically credit cards or an unsecured line of credit. But if you’re a homeowner, and you’ve been dutifully paying off your mortgage for a few years, you have a third option: using your home’s equity to secure a low-interest loan.
