Give Now

Are Home Equity Loans a Wise Move?

Thinking about a home equity loan?

Equity is the difference between a home’s value and what you owe on the mortgage. A home equity loan is a type of second mortgage. Funds are taken from the equity then repaid over a certain period of time. Now for some, it’s an easy, practical way to access cash to use for large expenses. It can be more cost-effective than credit cards or personal loans with high-interest rates, but is it wise? Professional advisors only give 4 reasons to use a home equity loan:

• Making home improvements that add value

Covering emergencies or prolonged unemployment

Consolidating high-interest debt or

• Funding investment properties 

If the money’s to be used for home improvements make sure they increase the home’s value and marketability. Analyze your income and work situation. Late payments could impact your credit score, and defaulting could mean you lose your home. Carefully structure a repayment plan. If not, the same need for cash could arise in the future. Using money to cover debt or luxury lifestyle choices can compound a spending problem. Now if you’re in a financial bind, pray first and don’t panic. A home equity loan might make sense for you. This, accompanied by disciplined spending, saving, and giving can grant you progress in the long term and propel you to renewed hope. Remember Proverbs 24: 3: “By wisdom a house is built, and by understanding it is established…” So seek the wisdom of God, then build your home and your life upon it.                

And if you’re overloaded with credit card debt, I recommend Christian Credit Counselors. They can create a debt management plan that will work for you. For more information call the Crown Helpline: 800-722-1976 or visit online at