Using Home Equity Credit? What Not to Do
A home equity line of credit (HELOC) uses your home’s equity to finance a variable interest-rate loan. You wouldn’t have the money upfront like you would a conventional loan. Instead, you draw against your line of credit. With a HELOC, your home is your collateral.
There are times a HELOC is a worthwhile mechanism. But it shouldn’t be used for just any purchase. The key is to know when a HELOC is not a wise move. There is a few “don’ts” when it comes to a HELOC.
Don’t Use to Solve Monthly Cash Flow Problems
A HELOC is not a good option if you’re having cash-flow problems. You’re simply using the HELOC to solve day-to-day budgetary shortfalls….