You're lazing on the front porch during a warm summer shower. You feel a drop, and then another. The drops continue and you realize that the roof is leaking. Replacing a roof just isn't possible when every dollar of your income is already budgeted for monthly expenses. That's when you realize the power of a home equity mortgage.

For homeowners in need of a little extra cash, home equity mortgages are a real bonus. To fully grasp the concept of a home equity mortgage, you need to know about equity and understand how a mortgage works.

If you have a mortgage, it's like any other type of loan. You borrow money from a lender, usually a bank or credit union, and agree to pay it back with interest. You will agree to pay the loan back through a series of monthly, semi-monthly, bi-weekly or weekly payments. Mortgages are amortized over a fixed period of time, typically twenty-five or thirty years. If you keep your current payment schedule and make your payments over the amortized period, you will repay the entire loan and will be debt-free.

As you continually make your mortgage payments, the equity in your home begins to increase. Every payment causes the equity in your home to grow a little more. Over time, you "own" more of your property and owe less to the bank. The property becomes a major asset, and the more home equity you have, the greater financial power you possess.

Home equity mortgages are amounts of money borrowed against the value of your own property. In essence, you are borrowing money against the value of the property that you already own. Homeowners have different reasons for taking out home equity mortgages, but it always boils down to cash generation.

One of the most common reasons that homeowners turn to home equity mortgages is debt consolidation. Mortgage rates are significantly lower than other types of credit. For example, your mortgage interest rate can be five percent, while credit card companies are charging a whopping eighteen percent.

It only makes sense to borrow money at five percent and incorporate or 'consolidate' all of those high interest debts into one easy monthly payment at a lower rate. The effort is worth your reduced stress alone, as you're able to breeze through the month without facing a stack of overdue credit bills. Be careful and remember that home equity mortgages only work if you have sufficient home equity to provide enough cash after covering the costs associated with the additional mortgage.

Homeowners also take out home equity mortgages to cover children's education funds, home improvements and virtually all sorts of reasons that they need to have cash on hand. Some homeowners will turn to home equity mortgages as a means to take advantage of lower interest rates. When prevailing market rates are lower, it's wise to refinance the loan and lock in at a lower rate. This can also be a relatively easy way to generate extra cash.

There are investment opportunities to be had from home equity mortgages. Borrowing against your home gives you access to funds that you can invest into a plan that pays a high rate of return.

Whether you need cash today, would like to consolidate your debts, or want to have a little extra tucked away for the future, home equity mortgages can offer the help you're looking for.