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If you’re a homeowner and need access to cash, borrowing against the equity in your property presents plenty of loan options. But deciding on the right type of home equity loan or home equity line of credit depends on your circumstances. You may also want to consider leveraging your home equity with a cash-out refinance instead of adding a second monthly payment tied to your property.

The first step toward determining whether you need to establish a new line of credit is by understanding the basics. To start off, that means asking yourself, what is a line of credit? In short, a line of credit provides access to a limited amount of funds, allowing you to borrow as little or as much of that amount as you need. Once approved for a line of credit loan, borrowers can think of themselves as their own bank, as they gain full access to those funds whenever they need it.

As a homeowner, it’s important to understand how to make the most of your property’s value. The best way to start is by wrapping your head around what home equity is and how it’s measured.

Whether you’re planning to make a major purchase, pay for house renovations or cover unexpected expenses like medical bills, a revolving line of credit could present a viable financial solution. Put simply, a revolving line of credit is a loan offered by lending institutions that you repeatedly use and repay. Credit cards, which allow users to make minimum payments or pay down their debt in full, are one of the most common forms of revolving lines of credit.

So, you’ve decided to take out a home equity line of credit, using your home’s value to finance home improvements or achieve another financial goal. But your work doesn’t end there. You still face some decisions that can make a significant difference in the total amount you ultimately pay your lender, such as whether you want a fixed rate HELOC or a variable rate HELOC.