---
title: "What Is Home equity loan? Home Care Glossary | HomeCare.com"
description: "A home equity loan is a lump-sum loan secured by your home. You borrow against equity, which is the home's value minus what you owe on it. The rate is..."
url: https://homecare.preview.multisites.ai/glossary/home-equity-loan/
publisher: HomeCare.com
phone: 800-974-3458
start: https://care.homecare.com/?source=homecare.com
---

Paying for care

# Home equity loan

A home equity loan is a lump-sum loan secured by your home. You borrow against equity, which is the home's value minus what you owe on it. The rate is usually fixed, so payments stay the same. A home equity line of credit, or HELOC, works differently. It is a revolving credit line.

## Why it matters for your family

Some families use home equity to pay for care so a parent can stay at home. The CFPB notes that both loans use the house as collateral, so a lender could foreclose if payments are missed. A loan adds a monthly bill, which can be hard on a fixed income. A common mistake is to borrow more than the family can repay. Another is to forget how a loan affects Medicaid planning later. Compare interest rates and fees from several lenders. A financial professional can help you judge the risk.

Source: [consumerfinance.gov](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-home-equity-loan-and-a-home-equity-line-of-credit-heloc-en-247/)

[Read more: Paying for care](https://homecare.preview.multisites.ai/paying-for-care/)

## Related terms

-   [**Reverse mortgage**A reverse mortgage is a loan that lets homeowners borrow against home equity without making monthly mortgage payments.](https://homecare.preview.multisites.ai/glossary/reverse-mortgage/)
-   [**Private pay**Private pay means a family pays for care directly from its own money.](https://homecare.preview.multisites.ai/glossary/private-pay/)
-   [**Medicaid planning**Medicaid planning is the legal arrangement of income and assets so a person can meet Medicaid rules for long-term care.](https://homecare.preview.multisites.ai/glossary/medicaid-planning/)
-   [**Aging in place**Aging in place means staying in your own home as you get older.](https://homecare.preview.multisites.ai/glossary/aging-in-place/)
-   [**Cost of home care**The cost of home care is the amount a family pays for in-home help.](https://homecare.preview.multisites.ai/glossary/cost-of-home-care/)
-   [**Elder law attorney**An elder law attorney is a lawyer who focuses on legal issues of older adults.](https://homecare.preview.multisites.ai/glossary/elder-law-attorney/)

[All glossary terms](https://homecare.preview.multisites.ai/glossary/)

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