House-rich consumers are using their homes to help them get out of debt

Published On Sep 28, 2024, 8:00 AM

The article discusses a trend where homeowners are increasingly utilizing home equity lines of credit (HELOCs) to manage and pay down debt, largely spurred by rising living costs and significant home equity accumulation, averaging around $315,000. HELOCs are being leveraged for debt consolidation as they typically offer lower interest rates compared to credit cards. As credit card debt has reached $1.14 trillion, many homeowners see HELOCs as a more manageable way to reduce high-interest obligations. However, financial experts caution about the risks associated with using HELOCs, primarily the risk of losing one’s home if payments fall behind. The article emphasizes the importance of disciplined financial management when using these types of loans.