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Your house isn't a piggy bank

Your house isn't a piggy bank

U.S. homeowners are sitting on nearly $6 trillion of home value they could tap as of May 2018, according to data provider Black Knight. Lenders are eager to help many do just that through home equity loans, home equity lines of credit and cash-out refinancing.

The rates are often lower than other kinds of borrowing, and the interest may still be deductible, despite last year's tax reform changes. But you can lose your home to foreclosure if you can't pay back the loan, which is why financial planners generally frown on using equity for luxuries, investing or consolidating credit card debt.

"Having equity in your home is a huge financial advantage that can provide for significant flexibility, security and peace of mind," says Howard Pressman, a certified financial planner in in Vienna, Virginia. "It is not an ATM that can be used to supplement your lifestyle."

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