What's the deal with HELOCs?

[Hannah Tucker]

HELOCS sound good in theory but after listening to Dave Ramsey's podcast, I've heard them shutter at people using HELOCS to finance. I am in a real estate class currently and the professor posed HELOCS as a positive so I'd like some outside feedback and see some differing views about this subject.

Thank you!

[Chris Seveney]

@Hannah Tucker

If it’s on your primary residence it’s very risky to use equity from your home for an investment property. If you do it it’s typically meant to be used for short term financing

Long term you are borrowing for down payment so your true equity in the property is zero and puts you at a a lot of risk.