There are two main ways to tap into your home's equity:  through a second mortgage or a home equity line of credit.  Both of those loans are types of home equity loans.  A second mortgage is a loan for a fixed amount.  As with other installment loans, you are given the entire amount of loan at once and pay it back in regular monthly payments.  With a home equity line of credit, you are, you are approved for a home loan of a certain amount, and than you can borrow up you credit limit.  For the lenders offering a second mortgage or home equity loans click on one of the links above or continue reading for additional tips for acquiring home equity loans:

Home equity loans require borrowers to put up their homes as collateral or security for the equity loan.  Securing the loan with your home helps reduce the interest rate you will pay on your equity loan, but if you fail to make your loan payments, you run the risk of losing your home to the home equity lender.

Because home equity loans offer valuable tax advantages, they can be an attractive device for consolidating your debts.  In most cases, you can deduct home equity loan interest on loans up to the value of your home, but not the portion of equity loan that exceeds your home value.

Most equity loan lenders offer home equity loans equal to anywhere from 50% to 80% of home's value, minus the first home mortgage.  Some sub-prime lenders offer loans totaling 100% to 125% LVT of value of your home.  However, these can be particularly dangerous if home values stagnate or if you need to sell your home.

Don't take the decision to get a home equity loan lightly, especially if you are doing it to consolidate debt.  Before you decide on home equity loan consider the following facts:

        What is the home equity loan interest rate?

Home equity loans are often available at interest rates below other consumer loans.  This makes them a good source for refinancing expensive, nondeductible consumer loans.  Most home equity loans carry variable interest rates, which change as rates in the economy changes.   Some loans feature "interest only" payments.  Interest only home equity loans are best used to tide you over in tough economic times.

        What are the fees?

Fees and closing costs on home equity loans can range from nothing to thousands of dollars.  Closing costs may include an appraisal fee, a recording fee, title insurance, and a title search.  Be sure to ask about fill disclosure before you sign any loan papers.  A "loan origination fee" may be charged upfront and is often equals to 1 % of home equity loan amount.

          Is the Interest Deductible?

Generally, you can deduct the interest on home equity loans to a maximum of $100,000.  If you are using your home equity loan to pay for educational or medical expenses, interest payments may be fully tax deductible regardless if the amount.

If you take out a home equity loan to pay off your credit cards, be very careful.  If you don't change your spending habits, you are likely to treat the home equity loan as extra income, run up the new balances on your credit cards.  Do not take out home equity loan that offers access by credit card, that is asking for troubles.

A home equity loan may or may not appear on your credit report.  If your home equity loan does appear on your credit record, beware,  - a large available line of credit, even if you don't tap all of it may make other credit lenders shy away from granting you additional credit, meaning you might be turned down simply because you have a huge home equity line of credit available to you.