Getting a home equity loan or a home equity line of credit (HELOC) is an excellent way to leverage the equity built up in your home. However, it’s also risky. You’re putting your house up as collateral, so if something happens that makes you unable to repay the loan, you’ll end up losing your house.
Despite this risk, there are times when getting a home equity loan or line of credit actually makes a lot of sense.
When You’re Remodeling Your House
One of the best ways to use a home equity loan is for a project that will add even more equity to your home, like remodeling a room or building an addition. This is especially true since the interest rates on a home equity loan may be lower than those on a personal loan or personal line of credit.
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