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What to Know About a Home Equity Loan

A Home Equity Loan allows you to borrow against the equity of your home. Interested in learning more? Here are four important benefits, plus key terms, to remember.

Infographic of What to Know About a Home Equity Loan

Finance a Major Purchase

A Home Equity Loan can help fund a home expansion or remodel and help with debt consolidation or even college costs.

  • Equity: The difference between the current fair market value of the property and the amount still owed on the property.

Refinance Your Mortgage

You can refinance your mortgage with a Home Equity Loan, which features no closing costs1 and becomes the primary lien on your property.

  • Closing costs: Expenses typically due at closing, including an appraisal fee, taxes, title searches, credit report charges, and other fees.
  • Lien: A legal claim granted over an item or property to secure the payment of a debt.

Simplify Budgeting and Planning

In a rate-fluctuating environment, you'll have peace of mind with one consistent monthly payment at a fixed rate. You can pay it back over time with a variety of payment options.

  • Fixed rate: A variable interested rate loan can change over the life of the loan, whereas a fixed rate will never change over the life of a loan.

Borrow Up to 90% of Your Loan-to-Value

You can borrow up to 90% of your LTV ratio, as determined by the property valuation or appraised value.

  • LTV: Loan to Value, a lending assessment. The appraised value or property valuation vs. the total of the loan.
  • Property valuation: The fair market value of a given property, though the actual price of the property may be higher or lower. Fair market value is the price agreed upon by a willing seller and a knowledgeable buyer.
  • Appraised value: The value of the property, based on factors like location, condition, and recent sales of local properties.

1: Property insurance and flood insurance, if applicable, are required. ESL will pay all the closing costs and fees in connection with the opening of your account. However, if you close your account within the first 36 months of your account open date, you must reimburse us for the closing costs and fees paid in connection with opening your account. Definitions developed from and Learn more about Home Equity Loans by going to