There are several things to think about before taking out a home equity loan, but among the most important is to consider is what the loan will be used for.
“The best reason to take out a home equity loan is when it has some positive impact on your finances,” CNN Money’s Les Christie advises. “Using it to pay for a renovation that adds value to your property, for example, or to pay for an advanced degree that can increase your earning power.”
Conversely, taking out a home equity loan to buy a luxury car or to book a vacation is probably not the best idea.
Image via flickr/Alan Cleaver
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