A common question from consumers that we get frequently is "when is the best time for a home equity loan or a 2nd mortgage." Usually the best time to add a 2nd lien to your property is when you happy with your existing home loan but you need additional cash. Many homeowners choose to use home equity loans to wipe out credit card balances and loans that have high interest rates.
Another common use for an equity loan is to finance house repairs or to pay for home remodeling projects. Homeowners rarely come out of pocket to pay for room additions, because they generally choose to use home equity loans or cash out refinancing to fund the projects. This is often a wise financial decision because it preserves capital for homeowners and provides additional tax advantages that are difficult to realize when paying cash or using credit cards.