A home equity loan (sometimes abbreviated HEL ) is a type of loan in which the borrower uses the equity in their home as collateral. These loans are sometimes useful to help finance major home repairs, medical bills or college education. A home equity loan creates a lien against the borrower's house, and reduces actual home equity.

Home equity loans are most commonly second position liens (second trust deed), although they can be held in first or, less commonly, third position. Most home equity loans require good to excellent credit history, and reasonable loan-to-value and combined loan-to-value ratios. Home equity loans come in two types, and .

Both are usually referred to as second mortgages, because they are secured against the value of the property, just like a traditional mortgage. Home equity loans and lines of credit are usually, but not always, for a shorter term than first mortgages. In the United States, it is sometimes possible to deduct home equity loan interest on one's personal income taxes.

There is a specific difference between a home equity loan and a Home Equity Line of Credit (HELOC). A HELOC is a line of revolving credit with an adjustable interest rate whereas a home equity loan is a one time lump-sum loan, often with a fixed interest rate.

The borrower receives a lump sum at the time of the closing and cannot borrow further. The maximum amount of money that can be borrowed is determined by variables including credit history, income, and the appraised value of the collateral, among others. It is common to be able to borrow up to 100% of the appraised value of the home, less any liens, although there are lenders that will go above 100% when doing over-equity loans . However, state law governs in this area; for example, Texas (which was, for many years, the only state to not allow home equity loans) only allows borrowing up to 80% of equity.

Closed-end home equity loans generally have fixed rates and can be amortized for periods usually up to 15 years. Some home equity loans offer reduced amortization whereby at the end of the term, a balloon payment is due. These larger lump-sum payments can be avoided by paying above the minimum payment or refinancing the loan.

This is a revolving credit loan, also referred to as a home equity line of credit, where the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line based on criteria similar to those used for closed-end loans. Like the closed-end loan, it may be possible to borrow up to 100% of the value of a home, less any liens. These lines of credit are available up to 30 years, usually at a variable interest rate. The minimum monthly payment can be as low as only the interest that is due.

Typically, the interest rate is based on the Prime rate plus a margin.

Here is a brief list of possible fees that may apply to your home equity loan: Appraisal fees, originator fees, title fees, stamp duties, arrangement fees, closing fees, early pay-off and other costs are often included in loans. Surveyor and conveyor or valuation fees may also apply to loans, some may be waived. The survey or conveyor and valuation costs can often be reduced, provided you find your own licensed surveyor to inspect the property considered for purchase. The title charges in secondary mortgages or equity loans are often fees for renewing the title information. Most loans will have fees of some sort, so make sure you read and ask several questions about the fees that are charged.

• Home equity
• Mortgage equity withdrawal

• Putting Your Home on the Loan Line is a Risky Business - from FDIC

E-LOAN, Inc. is a nationwide financial services company that offers high yield savings accounts and certificates of deposit (CDs) through Banco Popular North America (BPNA), a New York state chartered bank that is the direct parent company of E-LOAN (i.e. E-LOAN is a wholly-owned subsidiary of BPNA). BPNA is a member of the FDIC (Federal Deposit Insurance Corporation) which insures bank deposits up to $250,000. It is also a wholly owned subsidiary of Puerto Rico-based Popular Financial Holdings, Inc.

E-LOAN also provides access to several lending partners that may be able to assist customers in obtaining home purchase loans, mortgage refinance, home equity loans, car loans, student loans, business financing, unsecured loans, and free credit reports. Headquartered in Pleasanton, California, the company has been operating since 1997.

In May 2005, E-LOAN launched a new advertising and branding campaign, and unveiled a new tag line: "E-LOAN. Radically Simple" 1 The campaign, created by Merkley + Partners in New York, was inspired by E-LOAN's belief in its pro-consumer values and the ways in which the company continues to improve the consumer lending experience.

E-LOAN Inc. currently owns the following trademarks: E-LOAN ®, E-LOAN - A better way to get a loan ®, My E-LOAN ®, PowerCheck ®, and E-LOAN Express ®.

• 1997: E-Loan, Inc. was founded by Janina Pawlowski and Chris Larsen to provide customers with access to mortgage loans over the Internet.

• 1998: E-LOAN received venture capital funding from Sequoia Capital. 2

• 1999: In June 1999, along with Larsen, Pawlowski led E-LOAN to a successful IPO. E-LOAN added car loans, credit cards, and small business loans to its product line in September 1999.

• 2000: E-LOAN became the first company to provide consumers with free access to their credit scores, allowing customers to check for possible incidents of identity theft or erroneous entries of credit debt. This was introduced at a time when many financial companies were reluctant to release this information.

• 2003: Larsen helped form “Californians for Privacy Now” to lead the fight for stricter financial privacy protection. After collecting over 600,000 signatures, the measure was placed on the California ballot and passed into law in 2003.

• 2005: Ownership of the company changed when Popular, Inc. acquired E-LOAN, Inc for $300 million. 3

• 2006: E-LOAN branched out into online Savings Accounts and CDs. 4

• 2007: E-LOAN cut 500 jobs as part of a restructuring plan in November 2007

At www.eloan.com, consumers can first shop for mortgage rates without entering any personal information. When they're ready to apply, consumers can quickly and easily complete an online application. Within approximately two minutes of customer submission, the loan is automatically underwritten and an email response sent to the customer. Once approved, a personal loan consultant contacts the customer within the hour to confirm the loan.

In 1998, E-LOAN launched E-Track, the first ever 24-hour loan tracking service, a proprietary system that allows borrowers to securely check the status of their loan application online at every stage of the process. E-TRACK gives customers a greater level of control over a process that has traditionally been confusing and frustrating in the offline world.

Using E-Track, customers will instantly know pertinent information such as the date that their application was received, which additional documents are required, appraisal results and lock-in status, and anticipated closing date. E-Track also provides current closing cost information including the exact amount of cash needed to close the loan and specifications for impounds and mortgage insurance. In 1999, the company launched E-Track Pro(SM), an extension of E-Track, for realtors to use to track their clients' mortgage applications in process at E-LOAN. 5

In February 2000, E-LOAN launched My E-LOAN, the first online account available to help people manage their loans as easily and intuitively as they manage their investments. 6 By setting up a customized My E-LOAN account, people can:

• Track interest rate trends & get an overview of the factors affecting current interest rates.
• Instantly receive their credit score for free, understand how it is calculated, and determine how the score may affect their loan rates & term.
• Access E-LOAN's full range of tools, calculators, advice and educational content.
• Access E-Track

Since 2000, E-LOAN customers have been getting approvals within minutes and mobile notary service for home equity loans. 7 They enjoy the convenience of automated appraisal valuations & receive their loan funds in as little as ten business days. Once they receive their check, they can use it for whatever purpose they choose, such as debt consolidation, college tuition or home improvements.

In 2002, E-LOAN unveiled Loan Advisor,8 the first financial planning tool to offer personalized advice to address customers’ unique debt situation. It asks consumers about their goals, how much money they are seeking, how long they will need the money, their tax rate and information about existing mortgage & home equity loans. It will then determine the loan solution that offers the lowest payments or has the lowest cost over the time period the customer is considering.

E-LOAN is not considered a subprime lender. The company has borrowers with higher credit quality. Nevertheless, in light of the significant changes and challenges in the mortgage industry, the company cut over 500 jobs as part of a restructuring plan in November 2007. 9 The layoffs were a result of a move to concentrate on loans eligible for repurchase to Fannie Mae and Freddie Mac, according to a U.S. Securities and Exchange Commission filing by Popular, Inc. The company has also temporarily suspended the acceptance of new "Home Equity" Wholesale loan applications.

Popular, Inc. has made the decision that E-LOAN will no longer operate as a direct mortgage lender in 2009. E-LOAN will continue to provide Certificates of Deposit and Savings Accounts through Banco Popular North America, which is a member of the FDIC. E-LOAN will also offer loan customers the option of being referred to a trusted consumer lending partner. All operational, general and administrative support functions will be transferred to other Popular, Inc. subsidiaries. 10 11

Customers who have already obtained loans through E-LOAN will not be affected. "It will be seamless," said Juan Carlos Cruz, the Vice President of Public Relations and Media for Illinois-based Banco Popular North America. 12

Since its inception, E-LOAN has garnered various awards for privacy and ease-of-use. Some of these include:

• Ranked #1 Mortgage Website for the 5th Consecutive Time - 2008 Mortgage Scorecard by Keynote Systems. This is the 5th consecutive win for E-LOAN.
• Top Financial Company for Privacy by TRUSTe and the Ponemon Institute (April 2007)
• Ranked #1 for Customer Respect (November 2006)
• Ranked #3 in Privacy by The Customer Respect Group (August 2005) E-LOAN was the only financial services company and the highest ranking online company to make the top ten.
• Highest rating in the First Quarter 2005 Online Customer Respect Study of North America's largest financial services firms.(March 2005)
• Easiest Site For Consumers to Use (March 2004)
• E-LOAN was the first lender to earn the Upfront Mortgage Lender certification.
• COMPUTERWORLD’s Safest Places On the Web
• Keynote rated E-LOAN #1 mortgage website in their Q4 2008 survey.

• www.eloan.com (Homepage)
• savings.eloan.com/savings (Savings & CDs)
• E-LOAN corporate About page