It’s important to remember that since a home equity loan uses your home as collateral, failure to make loan payments means you could lose your home to foreclosure. Also, depending on the lender, you could pay application fees, appraisal fees, underwriting fees, and more. Lastly, be mindful of the fact that borrowing against your home’s equity decreases your potential return on investment, which would negatively affect your ability to make a down payment on your next property.
