Your home is your largest asset, and you may choose borrow against it one or two ways: to secure a home equity loan in a lump sum or as a home equity line of credit (HELOC) to draw from as you need it. There are good reasons to borrow against your largest asset, but should it be used to pay down high-interest credit cards or for debt consolidation? Well, it depends on the person doing the borrowing.
FoxBusiness.com says first ask yourself, how’d you get into credit card debt in the first place? If it was an unforeseen event such an health issue, the loss of a job, or other events beyond your control, then a home equity loan is warranted. However, if you overextended your credit cards because of out-of-control credit card use, you may lack the restraint to rein in your expenditures, and your home could be at risk. So, you decide.