02/24/2016
The Do’s and Don’ts of Home Equity Loans http://s.sm.cc/yiDklw
With home values rising, homeowners who have equity, a much-valued resource, might be tempted to tap some of that wealth and use it for other purposes. But depending on your personal situation and how you’d like to use the equity, it may not necessarily be the right thing to do. Here’s when a home equity loan, which allows you to use the equity of your home as collateral, makes sense — and when it doesn't. DON'T: Fund a lifestyle Remember a decade ago when homeowners yanked cash out of their homes as if they were bottomless piggy banks to fund affluent lifestyles they couldn’t really afford? These reckless borrowers, with their boats, fancy cars, lavish vacations, and other luxury items, paid the price when the housing bubble burst. Property values plunged, and they lost their homes. Lesson learned: Don’t squander your equity! A home equity loan should be looked at as an “investment,” and not as “extra cash” when making spending decisions. DO: Make home improvements The safest use of
