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November 25, 2004 05:41 AM

Home Equity For The Holidays? OK, With Caution.


Excerpt: Home equity debt traditionally has been spent on investments that bring some kind of return -- renovating houses, paying for college, starting small businesses. More recently, as consumers have become more clever about using debt, equity loans have become to be seen as a cheaper, smart way to consolidate debt and pay for long-lasting things such as cars and SUVs and furniture.


This season, many consumers will charge against the home for the holidays.

They will use home equity debt to pay for gifts and travel. Some will do it directly, paying for presents and airline tickets with charge cards tied to home equity lines of credit. More will do it indirectly, by using equity to pay off credit card balances that end up as bloated as a turkey-sated family.

Home equity debt traditionally has been spent on investments that bring some kind of return -- renovating houses, paying for college, starting small businesses. More recently, as consumers have become more clever about using debt, equity loans have become to be seen as a cheaper, smart way to consolidate debt and pay for long-lasting things such as cars and SUVs and furniture.

But gifts and airline tickets to visit family? Believe it or not, bankers and consumer advocates agree that there are times when it's appropriate to pay for something so fleeting by charging it against the roof over your head. It's not exactly wise to go into debt to pay for presents, but if you're going to do it, you might as well do so as inexpensively as possible.

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Read all 22 posts in the same category of Home and Mortgage:

A New Way to Hedge Your Home's Paper Profit - Dec 12, 2004
California, U.S. in a Housing 'Bubble,' UCLA Forecast Says - Dec 11, 2004
21st-Century Landlords - Dec 10, 2004
Get Real About Real Estate - Dec 09, 2004
Can There Be Too Many Homeowners? - Dec 06, 2004
Selling Your Home - Dec 06, 2004
Conforming Mortgage Loan Limits Rise For 2005 - Dec 04, 2004
12 Tips For Wise Use Of Equity - Dec 01, 2004
Housing Wealth Reverberates - Nov 30, 2004
More Mortgages To Be 'Conforming' - Nov 30, 2004
Realtors Engage In Turf Battle With Discounters - Nov 28, 2004
Expanding The American Dream Commitment - Nov 26, 2004
'Tis the Season to Fix Up Your House - Nov 26, 2004
Sell Your Home — Fast - Nov 26, 2004
Most Expensive Gated Communities In America 2004 - Nov 26, 2004
Exchanging Real Estate Tax Free - Nov 25, 2004
Does It Pay To Save? - Nov 23, 2004
The High Earner/Poor Saver - Nov 20, 2004
Six-Figure Zip Codes - Nov 20, 2004
Buyer's Home Feature Preferences Reflect Lifestyles - Nov 16, 2004
Pattern of Strong Home-Price Gains Continues in Most Metro Areas - Nov 16, 2004