Homeowners can take advantage of the equity they've built in their homes with either a home equity loan or line of credit. When you take out a home equity loan, you're borrowing one lump sum. A home equity line of credit allows you to borrow from the same line whenever you need to, for up to 20 years.

With a home equity loan, you:

• Can spend your loan on anything you want
  
  
• Get lower interest rates than you could on an average consumer loan
  
  
• Are able to deduct the interest at tax time
  
  
• Can borrow as much as 100% in the equity of your home, with some lenders letting you take out as much as 125% of your home's value
  
  
• Choose how you want to pay your loan back: you can take anywhere between one year to thirty to pay off your loan.

People commonly choose home equity lines of credit when they anticipate multiple needs over a period of time, such as a series of smaller home improvements. With a home equity line of credit, you:

• Can use a special credit card to draw funds as needed (until you reach your credit limit)
  
  
• Can continue accessing your line of credit for up to 20 years
  
  
• Have a set amount of time after your initial borrowing period to pay off any remaining interest and balance
  
• Typically don't have to pay closing costs, but may possibly be responsible for paying a yearly fee.
  
  
• Can get as much of 100% of your home's value (with some lenders offering as much as 125%)

Both loan and line of credit let you borrow as much as 100% of your home's value (with some lenders offering as much as 125%).

Get as much as 100% of your home's value (with some lenders offering as much as 125%) as a line of credit. Use a special credit card to draw home improvement funds (until you reach your credit limit) whenever you need to, for up to 20 years! After your borrowing period you'll have a set amount of time to pay off any remaining interest and balance. Often there's no closing costs tied to a line of credit, with a possible yearly fee.