If you're considering tapping on your home equity or want the option of doing so quickly, your best choice is to arrange for an equity line-of-credit. These types of loans usually charge a lower interest rate than permanent loans. But be selective in your choice, the terms and cost of home equity loans can vary widely. You want to be sure to match your needs with the best terms and rates available.

A Standby line-of-credit
If you need a reserve to draw on in an emergency consider a standby line of credit. Look for a loan that doesn't charge closing costs and other up-front fees. Avoid lenders who impose annual maintenance fees. While no-fee lines charge a higher interest rate they can be competitive, especially when you draw on the line for short periods of time.

Short-term needs
If you plan to repay the loan quickly you want a line of credit with no fees and a low introductory interest rate. Look for an initial teaser rate that will last the time you owe the loan, such as 6 months or a year.

Long-term needs
If your borrowing needs are for a longer period of time focus on the lowest interest rate and don't be too concerned about the fees. The best rates will cap your interest at prime plus 1 to 1.5 points for the life of the term, usually 10 to 20 years.

TIPS:

Here are some simple things to ask when inquiring about a home equity line of credit.

No Usage Fees: Make sure that you won't be penalized for not borrowing on an approved home equity line of credit account.

No Loan Costs: There are plenty of "no closing cost" home equity lines of credit out there. Look until you find one.

No Account Maintenance: Make sure that your home equity line of credit will not charge any maintenance or check writing fees.

Be sure to ask questions of your lender, and seek the advice of a financial advisor to determine the features and benefits of the home equity loan that's best for your needs.

It is important to note that if you are borrowing against the equity in your primary residence, you have a legal right to walk away from that mortgage, for any reason, within three days of its issue.

The Truth in Lending Act requires you to cancel your loan in writing and the lender must release its interest in your home and return all fees to you.