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It allows you to borrow money, using your home's equity as collateral |
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Collateral is property that you pledge as a guarantee that you will repay a debt. |
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Equity is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have |
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A home equity loan (or line of credit) is a second mortgage that lets you turn equity into cash, allowing you to spend it on home improvements, debt consolidation, college education or other expenses. |
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There are two types of home equity debt: home equity loans and home equity lines of credit, also known as HELOCs. |
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