The housing bubble suffered in our country these past few years has affected the number of issued. However, many homeowners can still qualify for these loans, and they can be an excellent means of financing. Below are some key points to keep in mind.

How Much Equity does your House have? A major problem for many homeowners is that their homes are worth less than the mortgages they hold on them. This situation is called being underwater, and it’s a serious problem.

However, you may have sufficient equity in your home to qualify for a home equity loan if the current value of your home is sufficiently higher than the mortgage amount you currently hold.

While most homes have suffered a drop in value over the past few years, there is often sufficient equity available in the home to enable lenders to issue home equity loans. This is especially true if you own your home free and clear.

Keep in mind that lenders will normally be very conservative in the appraised of the value of your home. In many cases you could sell your home for a higher amount. However, the appraisers are trying to minimize the risk by assigning a conservative value.

Your interest rate and terms are based on the amount of equity and your credit qualifications (credit score, income, assets, etc.). Financial institutions have tightened up their lending standards, but recognize that this is still an excellent area for them to focus on, given the historically low interest rates.

Home equity loans can benefit the consumer by making much needed cash available for items such as home improvements, school tuition, medical expenses, etc.

Our economy is dependent on consumer confidence and the desire to spend money on goods and services.

Shop around. The first place to try for a home equity loan is your local Credit Union. The qualification process is typically easier and faster. Some Credit Unions are more willing to make home equity loans than others.

Be sure to check out your local Credit Union to find the best situation for you regarding rates, terms, and costs. These can vary significantly, but must be an accurate estimate by virtue of the truth-in-lending laws.