HELOCs are back again

Do you remember the hay days of Home Equity Lines of Credit (HELOC)? Now that housing prices are on the rise, they are back again with a new twist. They come in as one-time loan and lines of credit. Both have seen an increase in 2013 but no way near the level of 2006 where a record $430 billion loaned under HELOCs. Yet, some expects loans to account for $60 billion in 2013.

Equity in your home may be the largest investment for many and should consider borrowing against it very carefully. Equity build-up due to market price increases and tapping that to get a loan against this increase may be very risky for many that could lead to foreclosure.

These are somewhat difficult to obtain and may not be for everyone. Borrowers should consider the purpose of obtaining a equity line of credit, consider both loan and lines of credit options carefully, interest rate and terms of the credit line. Getting a loan for home improvement project make sense because it adds to the value. Interest you pay on the line of credit may also qualify for a tax deduction depending on your situation. But everyone should thread carefully.