There are always two aspects to debt, good and bad. The good one is that debt allows you to accomplish things you wouldn't otherwise be able to accomplish. Naturally, it is good to have more access to credit funds when you need them. The bad one is that debt leverages your finances, and reduces your financial stability. Your monthly payments are locked, you have to spend money on interest, you have less financial flexibility, etc. The question is how do you choose the compromise? The answer becomes simple if you look at the indicator called debt ratio.

Home Equity Line of Credit or briefly HELOC is a line of credit which offers low interest rates and uses your home equity as collateral. It offers a flexible and convenient way to borrow against the equity that you have accumulated in your home. Lines of credit have two major differences from Home Equity Loans (HEL). First, a HEL provides you with a lump sum, versus a HELOC, which allows the borrower to take only as much credit as needed, up to the maximal approved limit, i.e. works much like a credit card. In this way, you don't have to take more credit than you need today, ...