A home equity loan is a second mortgage that allows you to borrow against the value of your home, minus what you owe.
As you make monthly mortgage payments you are building equity in your home. You are growing the share of your home that you actually own and once you have enough equity (15% - 20%) you can borrow against it and use the cash with flexibility.
Replaces your mortgage with a new home loan that's greater than the amount already owed on your existing mortgage. You get the difference between the higher loan amount and the amount owed as a cash payment
