First Union Mortgage Corp. is the latest lender to offer a package of services centered on a home equity line of credit.

In announcing the package, First Union said it had developed the offering through extensive discussions with its customers and regarded it as the best home equity deal available anywhere.

Fred Pruitt, an executive vice president in charge of consumer credit, said the mortgage unit is making it very easy for people to qualify and to close the loan.

He said it is permitting higher debt-to-income ratios than other lenders. The introductory interest rate will be the prime rate for the first year.

The unit is also making, an effort at cross-selling. It is offering a package of other banking services along with the equity line of credit and will not charge monthly fees.

Mr. Pruitt said a $5,000 initial draw would activate the line and there is no minimum on subsequent draws.

The line can be accessed with special checks, with a Visa card if requested, or with an ATM card.

An optional feature will be overdraft protection for a customer checking account and automatic payment of monthly bills.

Also available as an option will be the ability to use up to 100% of equity.

With mortgage-volume down sharply, lenders have been looking for alternatives to fixed-rate home loans,

This has stirred vigorous competition and a wide variety of new configurations of adjustable rate mortgages and equity loans as well as a liberalization of credit standards.

The First Union equity line appears be in the mainstream of this trend.

Many lenders, including First Union, are billing equity loans as the last stronghold of tax deductions.

"Prime equity lines have considerable tax advantages said Mr. Pruitt. "Because this credit line is secured by your home equity, the interest you pay may be tax-deductible."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.