A HELOC is similar to a credit card. You have the fund available and can use them at any time. The difference is that in case of missed payments, your home is the guarantee for the loan. The interest traits tend to be flexible, as they depend on the economy. Besides, there are specific fees.
When should you get HELOC?
In which cases it is justified to take HELOC? Financing home improvements that increase the value of your home is a smart decision. Also, you can use it during emergencies when you need to get low-interest rates. However, make sure that you can pay it off in the next period. If you fail to do so, you can lose your home due to foreclosure.
When should you avoid a HELOC? There are specific situations when this is a bad idea. In this post, we cover this subject and make it clear for you.