If you’re a homeowner who has paid down a chunk of your mortgage or whose house has gained value, you might be able to take out a loan secured by your home equity. However, having equity in your home isn't the only requirement to qualify for a home equity loan. There are also rules about your credit score, debt levels, and more. How a home equity loan works Home equity describes the difference between the value of your home and your outstanding mortgage balance. For example, if your home is worth $400, ...