A home equity loan might be a good idea if you use the funds to make improvements to your home or consolidate debts with a lower interest rate. However, a home equity loan is a bad idea if it will overload your finances or if it only serves to change debt. A cash-out refinance may be a good idea if your home has risen in value. It's often the best option if you need cash right away and you also qualify for a better interest rate than on your first mortgage.
Home equity loans have many potential uses. In addition to acting as a home improvement loan, they can be a lifesaver when dealing with unforeseen expenses. If possible, avoid taking advantage of all your capital to ensure there are additional funds in case of an emergency.
