Here are the top 10 home equity line of credit mistakes that consumers often commit:

1. Not being aware of the pre-payment penalty clause. The pre-payment penalty clause requires the home buyer to pay a penalty fee in the case he decides to pay off the entire amount of his loan.  Penalty fees vary depending on the conditions that apply.  A pre-payment penalty may apply only to refinancing, to a home sale, or both.  Be sure that you check the pre-payment penalty clause in your contract.

2. Obtaining a large credit line. A credit line that is too high puts the borrower at risk.  Other creditors can also decline your application if the see that your credit line is too large.

3.  Thinking that a home equity loan is the same as a home equity credit line.  An equity loan is different from a credit line.  With an equity loan, the borrower receives the whole sum of money borrowed up front while a home equity credit line allows the borrower to take cash advances from his/her credit line during the whole term of the loan.

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