The truth is that home equity loan approval can take anywhere from a week—or two up to months in some cases. Most lenders will tell you that the average window of time it takes to get a home equity loan is between two and six weeks, with most closings happening within a month.

What happens if you default on a home equity loan?

Defaulting on a home equity loan or HELOC could result in foreclosure. If you have equity in your home, your lender will likely initiate foreclosure, because it has a decent chance of recovering some of its money after the first mortgage is paid off.

Can a home equity loan be used as a first mortgage?

Your first mortgage is the one you used to purchase the property, but you can place additional loans against the home as well if you’ve built up enough equity. Home equity loans allow you to borrow against your home’s value over the amount of any outstanding mortgages against the property.

How to qualify for a home equity loan?

To ensure you will qualify for a home equity loan, take a personal financial inventory to make sure that you meet the criteria above and can pay back any money you choose to borrow. Remember, your home is the security for your home equity loan, which means failure to pay your loan could put your house in jeopardy.

Can you borrow against your home for a home equity loan?

That’s $75,000 you can potentially borrow against. Using your home to guarantee a loan comes with some risks, however. Home equity loans can provide access to large amounts of money and be a little easier to qualify for than other types of loans because you’re putting up your home as collateral.

What happens to your interest rate on a home equity loan?

Your interest rate will be set when you borrow and should remain fixed for the life of the loan. Each monthly payment reduces your loan balance and covers some of your interest costs. This is referred to as an amortizing loan.