What are the Risks of a HELOC?

This article will explain some of the risks associated with a Home Equity Line of Credit (HELOC) that borrowers should be aware of.

Michael Tennant

Mar 29, 2024 - 1 min read

What are the risks of a HELOC?

Though a HELOC offers flexibility and access to funds, it also comes with risks such as potential foreclosure if you're unable to make payments.

How can I mitigate the risks associated with a HELOC?

One way to mitigate risks is by borrowing only what you need and making payments on time. Tennant Lending advises borrowers to have a solid repayment plan in place.

What happens if the market value of my home decreases?

If the market value of your home decreases significantly, you may find yourself owing more than your home is worth. Tennant Lending recommends discussing options such as refinancing or modifying loan terms in such scenarios.

Can I lose my home with a HELOC?

Yes, since a HELOC is secured by your home, failure to meet repayment obligations could result in foreclosure. Tennant Lending emphasizes the importance of understanding all terms and conditions before proceeding.

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