Daily Real Estate News  |  September 1, 2004  |   Home Equity Loans: Start With Strong Base Homeowners have plenty of interest in home-equity credit lines, but how should they structure them? Though property owners can obtain variable-rate lines of credit with less than 5 percent interest, the Federal Reserve's plan to continue hiking short-term interest rates will boost their monthly payments over time. Thus, experts urge borrowers to consider traditional home-equity loans with fixed interest rates instead. It is also recommended borrowers take only what cash they need to avoid depleting their equity, leaving them owing more than the real estate is worth if they are forced to sell. Finally, borrowers would be wise to tap into their equity to fund home improvement projects or pay college tuition. Those who plan to use the money to repay their credit cards should tighten their purse strings, however, to avoid racking up more debt.

Source: USA Today (08/31/04); Block, Sandra