Home equity loans are loans against the value of your home. If you are still paying off a mortgage, you can borrow up to 75 percent against the part of the home you actually own.
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Home equity loans are attractive to lenders because they see a secure lending risk with solid collateral, the house. They will therefore, provide lower interest rates for such loans.
Of course before making the decision whether or not to borrow against your home, you should factor in a lot of variables, primarily your personal family situation. Borrowing to get out of debt and putting your house at risk can be emotionally very stressful and financially risky. Borrowing, with money securely invested, however, to make major home improvements or to buy a small vacation home might be worthwhile. If you are borrowing to pay for something that has appreciation, you can eventually make back the money that you are paying in interest on the loan. Home improvements can increase the sale of your home or a vacation house in a desirable area can be profitable when you sell it.