Millions of Americans are using home-equity loans and lines of credit. Here's how to know if you're getting a good deal:

Compare the rates. The rate you'll be offered on a loan or line of credit depends heavily on your credit score, perhaps too much. If you have an excllent score of 760 or above, you should be able to win a home-equity line of credit for half a point. A good score of 700 to 759 should win you a rate equal to prime. People with mediocre to poor credit can pay 1 to 5 points over prime, or more.

Avoid the fees. If you have decent credit, you shouldn't have to pay any application or appraisal fees to borrow against your home. You may have to pay recording fees, which should be minimal, and an annual fee on your credit line.

Know the tax rules. Home-equity borrowing is often touted as superior to other consumer debt because you can deduct the interest. But that's not always true. You have to be able to itemize, which most taxpayers can't do because they don't have enough deductions. Also, know that even if you do get a deduction, the tax break is limited to interest on loan amounts of $100,000 or less; if you've borrowed more, the interest you pay on amounts over $100,000 can't be deducted.

Know what you're risking. A home can be a good way to build long-term wealth. Every dollar of equity you borrow is a dollar that can't be used to buy your next home when you're ready to trade up, or to fund your retirement when you're ready to downsize. Be particularly wary of using your home equity to pay off crdit cards or other short-term debt. Often you'll just wind up deeper in debt.

In general you don't want the term of your borrowing to last longer than what you've purchased. If you use home-equity borrowing to buy a car, for example, try to pay off the balance in a few years, and definetly before you trade in for a new vehicle.

Maintain equity in your home. You should try to maintain at least 20% equity in your home. If your combined mortgage and home-equity borrowing exceeds that amount, you'll pay higher interest rates. You're also cutting yourself off from an important source of emergency funds.