If you’re thinking of getting a home equity loan or credit line, then congratulations; you’ve already decided to take advantage of the potential you have in the value of your home. I will outline the different options you have; and briefly touch on the risk of using the equity in your home to back a loan.Banks and finance companies are only too happy to extend loans to homeowners as the collateral is the home itself. Financial institutions don’t see much risk in extending credit when they know they can always put a claim on the house. But of course, a person’s credit rating is still important.There are two main types of homeowner credit offerings:1) a fixed-rate home loan is offered at a set interest rate, and is a lump sum payment to the borrower. The borrower repays the loan over a set time period.2) a home equity line of credit, or HELOC, is a variable-rate loan that works much like a credit card and sometimes comes with one. Borrowers are pre-approved for a certain spending limit and they can withdraw money when they need it, using a credit card or special checks. The monthly payments can change; based on the amount of money borrowed and current interest rates.Both of the above types of credit are available with terms that typically range from five to 15 years, and both have to be repaid fully if the home on which they are borrowed is sold.One of the best reasons to get a home equity loan or line of credit is to put money into home improvements. This can pay off handsomely if its well thought out. Other uses of home loans should always be planned cautiously, especially if you also have a mortgage. The equity in one’s home is the greatest asset most people have, and you don’t want to risk it unnecessarily. Make sure you are confident of your ability to repay what you borrowed without risking your house.