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Home prices have fallen and lending restrictions have tightened up, but there are still times when dipping into your home equity is the right move.
Before you treat your home like a glorified ATM by borrowing against its value, consider these five tips.
Have a Good Reason
Make sure you're spending your home equity appropriately. "Proceeds from a home equity loan shouldn't be used to purchase something that you'll consume, like a vacation," explains Dylan Ross, CFP and founder of Swan Financial Planning in New Jersey. "It's better to use it to pay for an asset, like an addition on your home." That way you have a chance of recapturing some of that value instead of just spending it away.
Have a Plan
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