What is a home equity product?

A home equity product refers to credit borrowed against the equity in a home. Home equity is the difference between the market value of a property and the outstanding mortgage balance. This type of product allows homeowners to leverage the value they have built up in their homes to access funds for various purposes, such as debt consolidation, home renovations, or major expenses.

The essence of home equity products lies in using the asset (the home) itself as collateral for borrowing, meaning that the lender can claim the property if the borrower defaults. This makes it distinct from other types of loans that may not be secured by the value of the borrower's home.

In contrast, options that suggest loans are intended solely to increase property value, or to make improvements, or are one-time loans, do not encapsulate the broader concept of a home equity product, which is fundamentally about borrowing against the existing equity. Therefore, the accurate description of what a home equity product is directly aligns with the definition provided in the correct answer.