In other words, the combined loan-to-value (CLTV) cannot exceed 75-80 percent. So if your home is worth $100,000, your CLTV could be up to $80,000 (80 percent of 100,000).

If your current mortgage loan is $60,000, you could get a home equity loan of $20,000. Home equity loans, which are usually based on the prime rate, have been on the rise. With prime at 8.25 percent, there are some equity loans that start below prime and can range upward from prime, or prime plus 1- or 2 percent.

Because your home is collateral for an equity loan, the interest you pay on the loan is often tax deductible, and the money can be used for any purpose; e.g., major purchase, college tuition, auto purchase, a vacation or home improvement, to name just a few.

Some lenders will allow combined loan-to-values of up to 125 percent, which would mean the borrower owes more than the home is worth.