But doing so can sometimes mean you're shooting yourself in the foot.
Here's when the move can be dopey:
Borrowing against your equity means you put your house at risk of foreclosure if you can't pay back what you owe with interest. So don't do it if:
- You habitually run a high credit card balance or have a hard time meeting your monthly payments. If you're so stretched that you need home equity to pay for your daily life or vacations, you should downsize your lifestyle.
- There's not much difference between the interest rate you can get on your home loan and the rate on your credit card.
- You want to pay off low-rate debt like a federal student loan. Federal student loan rates are typically lower than those on home equity loans and HELOCs.
- You want money to invest in the stock market. (Money Magazine's Walter Updegrave explains why.)