When borrowers take out a home equity loan usually they are excited about getting some money in their hands. Spring is the season when homeowners shake the money trees that they live in.
It's the time of year when homeowners borrow against their home equity: Did you know that over 30% of the home equity line of credit volume is requested between April and June because homeowners need assistance in financing house remodels. These people like money for fixing up their property.
But borrowers don't spend their equity completely on house repairs. They use equity loans and credit lines to refinance credit card debt, to purchase vehicles and to finance education. Now that the season for tapping equity is upon us, it's a good time to ask two questions: What are proper and improper uses for home equity debt? How much secured debt is too much?