A home equity line of credit is a great way for the smart homeowner to get the funds he or she needs to make home improvements and repairs, pay for college costs and many other reasons. The low interest rates of the last few years, combined with ever increasing home values, has combined to create a great environment for home equity lines of credit, and they remain a favorite with all kinds of homeowners. As with any other type of loan, however, it is important to get the best possible deal on that home equity line of credit.

The home equity line of credit differs from a traditional home equity loan in that the funds can be tapped as needed, instead of being paid as one lump sump loan amount. This makes the home equity line of credit an excellent vehicle for paying recurring bills, such as tuition costs, and for paying costs that are hard to predict, such as home repairs or improvements.

Another advantage of a home equity line of credit is that the interest rate is generally lower than other types of loans. It is important to remember, however that a home equity line of credit is secured by the home itself. This of course means that failure to repay the line of credit could put your home at risk.

This is an important thing to remember, particularly when using a home equity loan or home equity line of credit to pay off unsecured loans such as credit cards. While it may be tempting to retire those high interest credit card debts, it is important to get your credit, and your spending, under control before doing so.

While getting rid of those high interest credit cards is a worthy goal, putting your home at risk to do it is not always worth the risk, particularly if you think you may be tempted to rack up for debt in the future.

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