For homeowners looking to fund major expenses, like home renovations, education costs or debt consolidation, a home equity loan can be an attractive option. And, that's especially true in today's unusual economic environment. Not only are home equity loan rates currently lower than the rates on credit cards or other types of loans, but the average homeowner currently also has about $300,000 in home equity right now.
So, as part of determining whether you can afford a home equity loan, you should look critically at how stable your current employment situation is. Have there been recent layoffs or reductions at your company or in your field? Were you recently hired or do you plan to change jobs soon? If the answer to either of those questions is yes, be sure to weigh whether you'd still be able to afford your home equity loan payments if you were to be temporarily displaced from your current position.