By using the equity in your home, you may qualify for a home equity line of credit that works much like a credit card, available for use when and how you please, but at a lower interest rate and often lower payments. Under the tax law-depending on your specific situation, you may also be able to deduct the interest of your home equity line because the debt is secured by your home. Amy Crews Cutts, deputy chief economist at Freddie Mac says that, "Smart consumers are out there making plans. . . . They are either consolidating debt, or leaving the table with a check, or both." Now might be a good time to look at getting a home equity line of credit if you have major expenses coming up or are looking to consolidate debt.

A home equity loan in the form of a credit line is revolving credit in which your home serves as collateral, making it a secured loan. Usually these loans are at a variable rate, meaning that if the short-term interest rate goes up, youre equity line of credit payments will go up as well. If this presents a problem, you may want to also look into mortgage refinancing at a fixed rate or a second mortgage at a fixed rate. However, having a home equity line of credit on hand can be a useful alternative to racking up credit card debt, especially if you are planning to pay the money back over a short period of time. Home equity loans today are used for a variety of purchases including:

1.Making Home improvements  2.Buying a vacation home 3.Financing Investments 4.Paying for Education 5.Debt Consolidation 6.Financing a new car 7.Financing a vacation 8.Redecorating 9.Paying off Medical bills 10.Saving for Emergencies

The home is usually a consumer's largest asset and therefore many homeowners use their credit lines only for major items such as education, home improvements, or emergencies and not for day-to-day expenses. However, if you are planning to use a credit card for certain purchases, a home equity line of credit may be the smarter way to finance. Of course, you have to remember that your house is collateral and you could lose it if you dont make your payments, so do your research and find what is best for you.