HOME EQUITY LOAN Definition

Bookmark and Share

HOME EQUITY LOAN is a type of loan in which the borrower uses the equity in their home as collateral. These loans are sometimes useful to help finance a business, major home repairs, medical bills or college education.

Learn new Accounting Terms

INTEREST COVERAGE is a ratio which indicates the ability of a company to cover net interest expenses with income before net interest and taxes. It is calculated by dividing income before interest and taxes by interest.

ABOVE THE LINE, a. in accounting, denotes revenue and expense items that enter fully and directly into the calculation of periodic net income, in contrast to below the line items that affect capital accounts directly and net income only indirectly; and, b. for the individual, is a term derived from a solid bold line on Form 1040 and 1040A above the line for adjusted gross income. Items above the line prior to coming to adjusted gross income, for example, can include: IRA contributions, half of the self-employment tax, self-employed health insurance deduction, Keogh retirement plan and self-employed SEP deduction, penalty on early withdrawal of savings, and alimony paid. A taxpayer can take deductions above the line and still claim the standard deduction.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.