Liz Weston: 3 reasons not to tap your home equity right now
By LIZ WESTON of NerdWallet.
House prices are soaring, and homeowners have a lot of value built up between what’s left on the mortgage and what their house is worth. Still, there are reasons to pause before cashing out that equity. Not only do you risk foreclosure if you can’t repay, but you might also need that equity later on — perhaps at retirement. Don’t risk your home to pay off unsecured debt, like credit cards, when bankruptcy or credit counseling might offer a wiser route. Finally, review what you plan to spend equity on: Will it go up in value or depreciate faster than you can pay it off?
