It took me a year to figure out the difference between these two. Unfortunately one year ago when I bought my condo, I used the latter one, which means when Fed raises the rate, my rate goes up too.
Today I found the following definition at GMAC mortgage (click on Home Equity).
Home Equity Loan
For immediate cash, consider our fixed-rate home equity loan. You’ll have the security of knowing the interest rate and payment stays fixed throughout the loan term.
Home Equity Line
For a revolving line of credit you can access when you need it, consider our home equity line. There’s no obligation to use it, and you won’t pay interest until you do.
I am not sure if I would qualify the home equity loan one year ago. It appears to me the lenders and mortgage brokers try to blur the lines between those two things (to their own interest).
I know it’s a bit late, but it’s better “late to know” than “being ignorant all the time”, right?