Your home equity is the difference between what you owe on your mortgage (and on any other home loans) and the market value of your home. You build equity as that difference grows —when you repay mortgage principal to decrease the amount you owe, or when your home's value increases.

If you're making a major purchase, home equity financing may be a more practical way to pay for it than using cash, credit cards, or other types of financing. Consider a home equity loan or line of credit for:

If you are overextended with credit and living month-to-month, debt consolidation might make your payments more manageable.