A home equity loan is also known as a second mortgage.
Technically, both a HELOC and a home equity loan are second mortgages, since they’re additional loans against your home behind your first mortgage, but a HELOC is treated more like a line of credit.
You can get a HELOC for 65 per cent of your property’s value, although the limit stretches to 80 per cent if you combine with an amortizing mortgage.
In order to get a HELOC you have to have at least 20 per cent equity in your home and as you get more equity, you can ask for the line of credit to be increased, although that requires a new application and qualification process.
Although you do have to pay for an appraisal fee and legal fees, they’re one-time charges.