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Equity in Home?


Is it a wise ideal to take out a home equity loan for investment purposes in case if I come across a good deal for and investment starter home?

Yes as long as you understand the risk and the return from the investment is greater than the interest cost of the loan. Because the home equity loan is tax deductible, its cost is less that the stated interest rate. Borrowing on your home equity at a low rate to invest at a higher rate is a good strategy, but you must understand that the investment you make does not always turn out as you expected.

It depends on the interest rate. It is just like any other loan, go with whatever loan has the lowest interest rate and terms that work for you.

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