There are basically two home equity loan types: term (or closed-end loans) and lines of credit.

Both are sometimes referred to as second mortgages, because they're secured by your property, just like your primary mortgage loan.

Both, Home Equity Loans and Home Equity Lines of Credit (HELOC) typically originated for a shorter term than first mortgages. The most common type of mortgages runs 30 years, while equity loans typically have a life of just five to fifteen years.

A Home Equity Loan, is a lump sum that is paid off over a set amount of time, with a fixed interest rate and the same payments each month.

Find the lowest home equity loan rates quickly by comparing top lenders. Varying home equity loan rates may translate into a difference of thousands of dollars over the life of the loan. (continued below)

A Home Equity Line of Credit works more like a credit card. You are allowed to borrow up to a certain amount for the life of the loan. During that time you can withdraw money as you need it. As you pay off the principal, your credit revolves and you can use it again. Let's say you have a $50,000 line of credit. You borrow $25,000 from it, but then pay back $10,000 toward the principal. You now have $35,000 in available credit. HELOCs have much more flexibility than a fixed-rate home equity loan for this reason. The downside to these loan types is that their interest rates are variable and will fluctuate over the life of the loan.