A key reason it's smart to get a home equity line of credit is that you may be able to deduct the interest from your taxes.

If you open a home equity line of credit and deduct your interest payments, you could lower the overall cost of your home improvement, debt consolidation or large purchase.

In most cases, home equity interest payments are deductible if:

• The total amount of home equity debt on your primary residence and second home does not exceed $100,000
• The debt does not exceed 100% of your home's appraised value.
• You itemize your deductions on your tax return (rather than taking the standard deduction).