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A home equity loan is a second mortgage that allows you to borrow against the value of your home. Your home equity is calculated by subtracting how much you still owe on your mortgage from the.
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Paying down your principal creates equity, which is the value of the home over and above the loan balance. If you have equity, you can borrow against it with a refinance home loan. Refinancing to a shorter term at a lower rate can allow you to pay off your loan faster with no or little increase in your monthly payments.
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