How to Use a Home Equity Account
A home equity account can be used for home improvements, which will increase the value of your home. You can also pay off high-interest rate credit cards with a consolidation loan. Interest paid on a home equity loan is tax deductible, but interest or finance charges paid on credit card accounts cannot be deducted. Home equity accounts can also be used for tuition, auto purchase, medical expenses or past-due taxes. The terms can vary from company to company, and you can access the funds a variety of ways.
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Instructions
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Write one of the convenience checks you were issued when the home equity loan was made. Make the check payable to whomever you want to pay. This will reduce the available credit you can access.
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Use the credit card you were issued. Your bank can issue you a credit card that has the Visa or Master Card insignia. You can make purchases at various merchants.
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Have a bank representative link your home equity account to your ATM card. You will be able to take out cash advances from an ATM using the card.
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Transfer money from your home equity account to your checking or savings account. The ATM will walk you through the steps after you key in your personal identification number (PIN).
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Go see a bank teller, present identification and your home equity account number and you will be able to receive a cash advance.
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Tips & Warnings
If you do not make your payments the lender can foreclose on your home. There could be an annual fee on your account. Some home equity accounts will charge a prepayment penalty. Your interest rate will be variable, and when the rate increases your payments will increase.
