Questions to Ask Before You Borrow
Any time you're tempted to use your home equity, ask yourself how important the purchase is. Will it help you achieve one of the most significant goals in your life? Homes are most people's major source of wealth, and that wealth shouldn't be frittered away on anything that's not close to their hearts.
You also should think twice about spending home equity on anything that doesn't gain in value. Your equity, if left alone, will rise over time. You don't want to blow it on a bunch of purchases that will soon have little or no value.
That said, let's deal with some of the most common ways people spend their home equity.
Paying off credit card debt. It's so tempting to pay off high-rate, nondeductible credit card ...