- Rates are not fixed and can shoot up (shoot up as in the rates go up, not shoot up like heroin).
- 80% of people who consolidate credit card debt into a home equity loan run their credit cards back up. Don't kid yourself.
- It is way too easy to borrow against them.
- Just making the minimum payment will take 'forever' to pay it off.
- In a down real-estate market you can end up underwater.
- The lender can call your loan.
- Don't use your home as an ATM machine.
Another name for home equity borrowers is "renter" or "homeless".
Home equity loans can be a good financial tool if used properly, just be careful.