Time to Rediscover the Home Equity Loan

Of course, if your needs are really short term -- a year or two or less -- then you might go with a variable-rate home-equity line of credit , or HELOC. Many of these loans now start at only 3% or 3.5%, and they charge very low fees -- even less than on fixed-rate home equity installment loans.

The catch: after a few months the HELOC rate starts to float every month, and you can expect it to go pretty quickly to 5% or 6%, depending on your credit rating. In the future it could go higher, so HELOCs are for borrowers able to pay off the balance quickly if rates jump.