Are home equity loans good products to use to complete small renovations?

Yes, they are good products. There are 2 different products.
A HELOC is a line of credit. You will receive a checkbook and you draw on that
line, as you see fit. Your monthly bill is based on the current rate of the
line and the amount owed, not the max amount of the total line. You usually have
an interest only payment for the first 5-10 years and the line of credit can be
for a total length of time of 15-25 years.
The rate is based on Prime, which is currently 3.25%. The adjustments to
HELOCs for a borrower can be based on credit, loan to value and amount of the

A HELOAN is a fixed loan. It is just like a first mortgage.
You borrow a certain amount of money, at a fixed rate, over a certain number of
years and you have the same payment until the debt is complete. You receive all
of the money up front.

On HELOCs (Home Equity Lines of Credit), your payment is
interest only for the first 5-10 years, therefore giving you a very small
monthly payment. To pay it down, you need to pay above the minimum payment.
Since the payment is interest only, the balances get re-calculated every month.
Also, the interest on a HELOC or HELOAN is tax deductible.

Lastly, if the rates on first mortgages are low enough, you
might want to consider doing a cash-out refi, if the savings and drop in rates
is substantial enough. Your mortgage broker can run different scenarios to see
what will be your best option.

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