Home Equity Loans
A home equity credit line is a re-usable credit account which is secured by the equity in your home. It has an adjustable interest rate, usually based on the prime rate as published by the federal reserve or in the Wall Street Journal. Depending on your credit, lenders may offer a credit line based on prime rate plus a margin, such as, a quarter of a point, or prime plus no margin.

There is a draw period of usually 10 to 15 years where you can withdraw the funds as you desire. During the draw period, you have the option of making interest only payments, or fully amortized payments each month. At the end of the draw period, the home equity credit line will convert to a fully amortized loan for the remainder of the balance.

A home equity credit line is different from an equity loan because you are able to draw money out of the account as you need it, instead of receiving the full balance of the loan at closing. Another difference is the adjustable interest rate, which can adjust every month depending on the economy. Also, closing costs are usually less for a credit line when compared to a fixed installment loan. 

Because a home equity credit line is secured by your primary home, the interest portion of your payments can be tax deductible. Also, some lenders will lend as much as 100% loan to value.