Two months ago, we decided to take out a home equity loan. We had to have our income and credit history checked, and also the loan-to-value ratio of our home.

When all was done, we had to pay approximately 3% of the overall home loan. This was for lender fee, which included costs for appraisal, credit check, document preparation and also application.

We decided on home equity loans as we needed to free up some cash as our brother was starting college soon and we did not have enough money for his new term fees.

Home equity loans are more attractive as they are tax deductible and have a lower interest rate than credit cards.