Financial Expert Dave Ramsey Warns Against Using HELOCs for Debt and Home Equity Access

Leases & LoansMoney Matters
Written By Jennifer Joslyn

Dave Ramsey, a financial expert, is concerned about the growing trend of homeowners using home-equity lines of credit (HELOCs) to access their home equity for various purposes, such as buying additional property or paying down consumer debts. Ramsey views HELOCs as risky because they involve transferring debt from one source to another and put the homeowner's property at risk of foreclosure if the loan isn't repaid. Additionally, HELOCs often come with variable interest rates, which can be higher than traditional fixed mortgage rates, making them a potentially costly choice. Ramsey advises people to limit their lifestyle upgrades, pay in cash for property when possible, and aim for a debt-free financial situation.

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