Home equity loans and home equity lines of credit (HELOCs) allow homeowners to tap into the value of their homes. A home equity loan is a fixed-rate, lump-sum loan that allows homeowners to borrow up to 85% of their home’s value and pay that amount back in monthly installments.

What the market trends are: With current HELOC rates slightly lower, they could be the cheaper option for short-term borrowing, but rising rates could make them more expensive over time. If you prefer stability, a home equity loan's fixed rate might be worth the extra cost.

The more equity (value) you’ve built up in the home, the more money you can access via a HELOC. A HELOC allows you to borrow exactly what you need, typically for lower rates than other forms of credit,