QandAs: Loans

Can you convert a Home Equity Loan into a Second Mortgage?

Answer:
The phrases "home equity loan" and

"second mortgage" are actually synonyms. These phrases refer to home loans that provide a fixed amount of money to the borrower at the time of closing, that is to be paid back over a certain period of time with minimum monthly payments required.

Some people mistakenly refer to "home equity lines of credit" as "home equity loans". If you have a line of credit, you have access to money that you may choose to use or not to use during the period of the loan. The interest rate is variable, and required payments may change as a result of the amount of money you have drawn against your credit line.

If you do have a "home equity line of credit" and you would rather have a loan with a fixed term, you can apply for a "second mortgage" or home equity loan that you can utilize to pay off the balance on your line of credit account.


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