DETERMINANTS OF THE DEMAND FOR HOME EQUITY CREDIT LINES

From the Survey of Consumer Finances conducted in 1989 and 1992 a legi t model was tested for demographic and financial influences on househo ld decisions to utilize home equity line credit. Results indicate that among households with credit fines other than credit card lines or bu siness lines, the choice of a home equity credit line in lieu of anoth er type of check credit line is influenced principally by percentage o f equity in the home, income, net worth, age of the borrower, and cred it price, Several implications may be derived from this study, As the markets reflect more complete information about the low-risk attribute s of this credit, the convenience as a payment mechanism, and the tax subsidy to homeowners, it is expected that home equity credit lines us ers will be distributed more evenly across income and wealth categorie s.