I'm considering taking out a home equity loan, but am worried about owning even more on the house, and never being able to pay it off. Are home equity loans worth it?
Caution is the word here. A home equity loan is like a big credit card. If there is some reversal in your income and you are unable to pay, not only could the home be foreclosed under you, you would be personally liable for a "deficiency judgment" if the value of your equity in the property was insufficient to pay off the loan. If we have learned anything from the bursting of the real estate bubble these last few years, homeowners should make sure they will have sufficient income over the life of the loan to pay loans secured by real property.
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