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Home Equity Loan:
A "home equity loan" is a type of loan that allows a homeowner to borrow money against the equity that they have built up in their home. Equity is the difference between the value of the home and the amount that is owed on any mortgages or other liens. Home equity loans are typically junior mortgages, which means that they are secured by the home and are subordinate to the primary mortgage.
For example, if a homeowner has built up $100,000 in equity in their home, they may be able to take out a home equity loan for up to that amount. The loan is secured by the home and the lender may be able to foreclose on the home if the borrower defaults on the loan payments.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
A home equity loan, oh what a thing,
It lets you borrow money, like a king.
Against your home's value, you can take a loan,
And use the money, like it's your own.
It's like a piggy bank, filled with your home's worth,
And you can borrow some money, to spend on mirth.
But remember my friend, it's a loan you must repay,
Or else your home may go away.
It's secured by your house, so it's quite safe,
And you'll get a lower rate, than other loans at your place.
Just be careful, and don't get in too deep,
And your home equity loan, will let you sleep.
So when you need some money, and your home's your pride,
A home equity loan, can help you take a ride!