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In today’s market, home equity is a valuable commodity. With home prices falling, many are seeing the equity gains they enjoyed from appreciation during the housing boom wash away with the tide of foreclosures. If you still have a considerable amount of home equity despite the bubble burst, consider yourself one of the lucky few.

Unfortunately, the housing crisis has brought with it a lending crisis (and many other crises). As a result, it is much harder and more expensive to get a home equity loan than it has been in the past. Just because you still have some home equity doesn’t mean you can, or for that matter should, tap into it right way. In general, now is not the time to acquire new debt; it’s the time to pay off debt. You should be particularly cautious about acquiring debt tied to your home. Home prices have not hit a definable bottom yet, so pulling out equity now could be disastrous in the future.

If after getting a home equity loan, you will still have at least 20 percent equity in your home, you may be a good candidate for a home equity loan from a lender’s perspective. Whether or not it’s a sound decision for your finances, you’ll have to be the judge. Here are some tips for tapping your home equity wisely:

1. Know your credit score
Home equity loan approval and interest rates depend heavily on credit score. What constitutes a good credit score has changed since the economic crisis, however. In some cases, you may need a credit score of at least 720 or above to get a good home equity loan. The higher your score, the lower your interest rate. If your credit score isn’t up to par, you should work to bring it up before applying for a home equity loan. To shop for rates in your area use the Rate Search tool at BankingMyWay.com.

2. Adjust your debt-to-income ratio
Lenders will scrutinize your debt-to-income ratio when applying for a loan. To get approval, your monthly debt cannot exceed 38% of your monthly income including your first mortgage, credit cards and auto loans. If your debt is too high, wait to apply for a home equity loan until you can lower it to within the acceptable range.

3. Consider home prices in your area
Even though you currently have equity in your home, consider the trend of home prices in your area before borrowing against it. If prices in your neighborhood are still falling at the same rate, wait until they stabilize. If you have short sales, bank-owned homes or foreclosures nearby, expect your home value to fall even more. You don’t want to pull equity out of your home until you are reasonably certain of your home’s value.

4. Don’t use home equity for non-investment expenses
During the housing boom, many homeowners got in the bad habit of pulling equity out of their homes to pay for unneeded expenditures like vacations, new cars or even home theater systems. Equity in your home should help you build long-term wealth either by helping you trade up to your next home or contributing to your retirement. If you are going to get a home equity loan, use it for an investment that will contribute to your long-term prosperity like home renovations or continued education.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.