Why Financial Experts Are Warning Against Using Your Home as an ATM

Rising property values have tempted many homeowners to tap into their equity through HELOCs (home equity lines of credit) for investing or debt payoff. Sounds smart on paper, right? Not so fast.

Financial advisor Dave Ramsey calls this a “stupid” move, and here’s why the math doesn’t add up:

Your Home Is the Prize You’re Gambling With — Default on your HELOC and you don’t just lose the borrowed cash, you lose the roof over your head. Foreclosure isn’t just a number on a balance sheet; it’s financial ruin.

Variable Rates Are a Trap — You might lock in 6%, but rates can climb. Suddenly you’re paying way more in interest. That investment return better be legendary just to break even.

You’re Just Shuffling Debt Around — Moving debt from a credit card to a HELOC doesn’t make you debt-free; it makes you feel busy while staying broke. Ramsey’s hard take: personal finance is 80% behavior, not spreadsheets.

The Stress Is Real — Unlike a regular loan, a HELOC creates constant anxiety. What if your investment tanks? What if rates spike? You’re now losing sleep over the biggest asset you own.

Easy Access = Overspending — A HELOC is like having unlimited cash in your pocket. Borrow $50k, end up owing $75k because you kept pulling. Budget math gets ugly fast.

You’re Skipping the Emergency Fund — Using your HELOC as a backup plan for emergencies? That’s asking for a financial disaster. Variable rates + unexpected crisis = panic mode.

The Bottom Line: Your home should be an investment that appreciates, not leverage for risky bets. Build an actual emergency fund. Pay down debt the boring way. Keep your house safe.