Home equity loans are a type of secured debt, so you’ll need to have your home or property appraised. During the application process you and your lender will agree on a loan amount, interest rate and the length of time (or term) it will take to pay back the money you borrow. You’ll then complete paperwork so your lender can get your house appraised and put a lien on your property. The lien essentially acts as a contract for your loan since your lender can technically assume ownership of your house if you don’t pay back your loan. Once the loan is paid off, the lien will be lifted from your property.
There may be a small cost to have your house appraised. But depending on how much money you’re borrowing, the amount of money you save in interest charges by securing your loan may significantly outweigh the appraisal costs. Additionally, most lenders allow you to absorb the cost of the appraisal in the loan amount, so you don’t have to pay this money up front if you don’t want to.