What is it?
Home Equity is the difference between the value of your home and how much your owe on your mortgage.
For example, if your home is worth 250,000 and your owe $150,000 on your mortgage, you have $100,000 in equity.
Your home equity goes up in two ways as your pay your mortgage and if the value of your home increases.
How does it works?
You may be able to borrow money against your home. Typically, interest rate on loans against it can be much lower than other types of loans but not all lender offer this loan option. The equity in the home serves as collateral for the lender.
But be aware that, you may lose your house if you are unable to pay back the loan.