There are really two types of home loans available to consumers. Mortgages and home equity loans are really the main types of home loans.
Home loans such as mortgages are for consumers to purchase a home. A home equity loan is a loan that is given to you based on the amount of equity that you have built up in your home. In basic terms the amount of equity you have in your home is the price you could get for your home less the amount you still owe the bank.
It is obvious why people would take out a mortgage and the reasons for home loans based on the equity in your home are plentiful. People take out home equity loans typically for large scale home improvements or additions.
Home loans that are based on the equity in your home are typically the easiest to get because the financial institutions have the loan secured with the equity in your home and they view this as very low risk. Basically the banks need a guarantee that they will get their money back.