Your equity is the amount your home is worth, on the market, minus the amount you owe to your mortgage broker. For example, if your property is worth $200,000 and the balance you owe your mortgage broker is $100,000, then your home equity - the part of your property that you own free and clear - is $100,000.

A home equity loan is a loan that uses the equity in your home as collateral. That means you are using your home as a guarantee that you will repay they loan. Before you even consider borrowing against your home equity, you need to understand that a home equity loan reduces your home equity by the amount of the loan and that if you do not repay the loan, you could lose your house.

These loans have advantages and disadvantages compared with other kinds of borrowing. You should consider the pros and cons of borrowing against the equity in your property before apply for a equity home loan.

* The interest paid on a home equity loan is tax-deductible, just like the interest on your mortgage.

*Equity home loan rate may be lower than other kinds borrowing, such as credit card debt, because you're using your property to guarantee the loan will be repaid.

*A home equity loan gives you a source of funds for important big purchases: a college education, home improvement loan, a medical emergency, etc.

*Your payments on your home loan must be met or you could lose your home.

*Often you will have to pay closing costs, which can be substantial, this is money which will not be recoverable and will diminish your loan value.

Having a lot of equity in your home can make you a target of high-pressure sales tactics designed to get you to rush into an expensive loan you may not need. If you feel like you're being pressured to borrow, just say no - always take your time when you take out a home equity loan.

There are reasons that make a home equity loan a good choice but also reasons that are not good. You should consider wisely.

*Improving your finances - A home equity loan can consolidate your debts, by paying off high-interest credit cards or other high interest loans.

*Investing in your home - You can use a loan to increase your home equity by using it for needed home improvements or repairs.

*Investing in your future - Home equity loans can help finance an education or start a business.

*Spending the money on luxury items - Don't risk your house to buy that new car, big boat or take an expensive trip. You should save until you can afford it.

*Using the money for living expenses - If you're spending more than you're earning day after day, a loan will only delay the "inevitable." Try to find ways to cut your expenses instead. A credit counselor can help.

*Give the money to a friend or relative - Remember, it's your house that's on the line. Don't let a friend or relative pressure you to take out a loan for them. If they don't pay you back, they lose nothing - but you could lose your home.

If you're thinking about taking out a home equity loan as a last resort to get out of serious financial trouble, DON'T. Chances are, you'll just run up your debt again and will soon be just as bad off as you are today, and possibly lose your home as well. Get help instead! A credit counselor can help you improve your finances at little or no cost to you.

- You've considered the pluses and minus, you've studied the good and bad reasons and you feel you are ready to commit to a home equity loan. We have assembled a list of lenders that are anxious to commit to you. Click one or more of those listed and see what they have to offer. It is always a good idea to get more than one offer.