Home equity loans should be used sparingly

The versatility of the home equity line of credit has many consumers tapping into their home s equity to pay for home improvement projects, college tuition, weddings, new vehicles and credit card consolidation. While there are no restrictions on how the proceeds can be used, using your home s equity as a temporary solution to a long-term problem could jeopardize your home and credit.

For example, using a home equity line of credit to consolidate credit card debt can put you into further debt if you continue to use your plastic and carry a balance from month to month. Your home is usually your largest asset. If you choose to use your home for additional credit, be sure you have a plan and purpose for that credit, such as financing a home renovation to improve your asset and increase your home s value.

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