Home equity loans come in two flavors. There are home equity loans and home equity lines of credit. Both types allow you to borrow against equity in your home and lock in appreciation in your home.

Home equity loans are a loan made against your equity for a fixed dollar amount. The interest rate is fixed and you receive your money in a lump sum. Home equity lines of credit have variable interest rates and allow you to borrow an amount up to your limit similar to the way a credit card works. Home equity lines of credit come with checks or a debit card you can use to make purchases against your credit line. This type of credit line is ideal for homeowners that have home improvement projects planned because of the flexibility a line of credit offers.

Home equity lines of credit offer excellent flexibility at a premium price; because these loans come with variable interest rates you need to research lenders and shop around for the best loan. Here are some tips to help you along the way.

Clean Up Your Credit

Your credit score will largely determine how much your home equity loan will cost you. The better your credit score, the better the interest rate you will receive. If you haven