SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/home-heloc-risk

What is the biggest risk of a HELOC?

You could lose your home if you can't repay it.

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  1. It cancels your first mortgage
  2. You could lose your home if you fall behind ✔
  3. It makes your homeowner's insurance void

Why: A HELOC is secured by your home. If you can't keep up with payments, the lender could foreclose. The CFPB says to consider a HELOC only if you're confident you can keep up with the payments.

Huh, didn't know that: A HELOC or home equity loan on top of a mortgage is a second mortgage you pay in addition to your first.

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References

Answer: You could lose your home if you fall behind. A HELOC is secured by your home. If you can't keep up with payments, the lender could foreclose. The CFPB says to consider a HELOC only if you're confident you can keep up with the payments.

  1. CFPB: What is a HELOC? www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-line-of-credit-heloc-en-107
    If you fall behind or can't repay the loan on schedule, you could lose your home.
    Checked 2026-10-10.
  2. CFPB: Does a HELOC affect refinancing? www.consumerfinance.gov/ask-cfpb/does-a-heloc-affect-my-ability-to-refinance-my-first-mortgage-loan-en-252
    HELOC lenders can refuse to allow you to refinance your first mortgage loan.
    Checked 2026-10-10.

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Home & YardAfter signing a refinance or home equity loan on your home, how long can you cancel it?Home & YardWhat is the "draw period" on a home equity line of credit (HELOC)?Home & YardWhat kind of interest rate do HELOCs usually have?

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