A refinancing loan that rolls any closing costs or fees into the loan. These programs best serve people who have a reasonable amount of home equity , want to reduce their overall interest expense, and plan to stay in their homes. Most refinance programs also cap the allowable LTV at 97 percent, which means some borrowers won't have the option of rolling their costs in no matter what. Back to top Second mortgage A loan whose holder is in second place to collect money behind the holder of a first mortgage. When a first mortgage exists, a home equity loan is a second mortgage.
Tax deduction See interest tax deduction .
Transaction fee Charged with some home equity lines of credit for each use of the line. See fees . The process of analyzing risk and establishing a loan's terms and conditions, based on a borrower's credit-worthiness and the value of property that will be used to secure the loan. A rate that fluctuates based on various benchmark interest rates. Most home equity lines of credit have variable rates that adjust whenever the prime rate changes.