Patricia Stallworth No Comments

Today on MYM360 – When Is It A Good Idea to Use Your Home Equity Line of Credit? I got a question from a listener who wanted to know if it would be a good idea for him to use his home equity line of credit to pay off his credit card debt. My short answer is maybe. Now, let me explain. I would say YES if you plan to pay off credit card debt and then repay the loan quickly and not go back down the debt road again. It’s a quick fix and it can save you some money in interest rates because credit card interest is generally higher than home equity lines or loans.

On the other hand, my answer would be NO if you have no plan to pay off the loan quickly but instead to stretch out the payments for many years, or you consider it permanent debt that you will pay when you sell the house. Remember, a home equity line or loan places a lien on your property and puts your house in jeopardy so it should not be taken lightly.

Some other times when a home equity line may be helpful is to pay off unavoidable debt such as medical bills, education, specific investments and oh yes, for home improvements. On the other hand, I would discourage you from using your home equity line if your job is shaky because you might need the money later, to spend it on frivolous items or if you just see it as an extension of the money you have available to use.

Be aware that when you sell your house, you don’t get a choice of when to pay off any loans – they come right off the top before you get your cut and if you have taken out large loans or market values in your area decline, you could end up with very little to put towards a new space.

I’m a money coach and my mission is to help clients with the emotional as well as the practical elements of money management. Want to learn more about what I do and if I might be able to help you? If so, visit and sign up for a mini strategy session with me. Sessions are available for business owners as well as individuals and couples. Bring your questions and let’s see if I help you get to where you want to go faster.

Thanks so much for listening and as always remember that minding your money really is the path to a richer life!

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