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3. Using Home Equity Incorrectly
Many people who have equity in their home from paying down their mortgage, use home equity loans like it was free money. However, what they don’t take into consideration is that they have added to the overall mortgage by removing the asset they created from getting a lower balance.
According to an article in Bankrate.com, many use their equity loans to pay for college, pay down credit card debt and more. Ray Cavazos, Money Management International spokesperson, gives his perspective, “With home equity loans, you are placing your home on the line. If you default on this loan, you could lose your house.”
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