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N O - E Q U I T Y   L O A N S

A no-equity home loan is simply a confusing name for a high loan-to-value (LTV) home-equity loan, in which the amount you're borrowing surpasses your home's total value - often by as much as 25%. This creates a sort of hybrid secured / unsecured loan. Not surprisingly, these risky loans are aimed at the truly cash-strapped. And that's a booming market.

No-equity home-equity loans were most popular back in the late 1990s, when many lenders boldly offered high-risk loans and borrowers felt comfortable taking on additional debt. More recently, rising home values and attractive interest rates for mortgage refinancing have helped even cash-strapped homeowners avoid such excessive borrowing. And experts say these loans will regain popularity as the economy rebounds, since lenders will once again be more willing to lend to riskier borrowers.