If your home has increased in value and you are short on cash or have a large upcoming expense, you may be thinking about tapping your home equity. Home equity loans and home equity lines of credit (HELOC) are two easy ways to turn your appreciation into cash in hand, but how do you know which way to go—or if you should go at all?

While there are definite advantages to accessing your equity over taking out a personal loan or using credit cards, especially if you’re intending to use the funds for home improvement, the No. 1 thing to consider before you take any money out of your home is whether you can really afford it. Take out a home equity loan or use the funds from a HELOC and your monthly obligation will increase. But that’s not all. Should you have a change in circumstances like a job loss or simply extend yourself beyond your financial comfort zone, causing you to miss payments, you could be putting your home at risk of foreclosure. Read the entire article...