Why Financial Experts Are Slamming HELOC as a 'Risky Move'

More and more people are borrowing against their home equity (HELOC) to invest or pay off debt. Sounds smart? Dave Ramsey thinks it’s a trap.

Here’s why this strategy is getting roasted:

The nuclear option: You’re putting your actual house on the line as collateral. Can’t repay? Foreclosure enters the chat. Your biggest asset becomes your biggest liability.

Variable rates are a time bomb: You lock in at 5%, rates spike to 8%. Suddenly your monthly payment balloons. Variable-rate debt = financial roulette.

Debt shuffle isn’t progress: Moving debt around and calling it a win is just psychological theater. Ramsey’s harsh truth: personal finance is 80% behavior. Either you build discipline or you don’t.

The temptation trap: Easy access to borrowed money means you’ll likely pull more than planned. Surprise! You owe way more than expected and your budget doesn’t have it.

Emergency fund > HELOC: Using a HELOC to cover emergencies turns one crisis into two. Now you’re paying variable-rate interest ON your emergency. Build a real emergency fund instead.

Investment risk is real: Borrow $100k to invest, market tanks, you’re left holding the bag AND the debt. No guarantees in investing—but your loan repayment? 100% guaranteed.

The bottom line: Using your home as an ATM for investing or debt payoff feels like a move, but it’s trading sleep for leverage. Ramsey’s advice: skip it.