Before taking up another debt, ask yourself
whether you can afford more debt and, if so, how much.
If you're out of a job, your home is on the
line if you can't make the loan payments.
Make your mortgage payments a priority.
Home equity loans are not
for day-to-day expenses or vacation.
There's a flaw though in using
equity debt to pay for your daily expenses, medical
care or big purchases. You are at the mercy of
the creditors should you eventually have to declare
bankruptcy. Read
Chapter
7 Bankruptcy.
Keep some home equity freed
up for emergencies.
Don't
tempt yourself by carrying your home equity credit card or
checks with you all the time.
Maintain
good credit rating. Banks monitor your payment habits and
if they see a change for the worse, they could reduce or freeze
your credit.
Finally, read the fine print
in your loan agreement. If a lender is unfamiliar to
you, check with government agencies to see if there have
been any complaints.
