Be Aware of Your Home Equity Debt Load

Your home equity load should never become overwhelming to the point you cannot make your payments on the debt or other debts. Most home equity lenders will let you take on very high limits and run up charges, so it is up to you to know when your load is too high for your income.

Budget Effectively

You should never have a debt load outside of a reasonable budget. The sum of all your fixed costs each month, such as your mortgage, car payment and home equity loan, should never be more than half of your monthly income. If it is greater than half, you will find a hard time paying for the other day-to-day necessities you have like groceries and utility bills.

Set Aside Emergency Funds

You should be able to pay the debt and all others for at least three months if you were to lose your income. This emergency fund is the only thing protecting you from immediate default and foreclosure if you lose your job. If your debt could not be paid in the case you lost your income, then you should think about paying some debt down to assure you can continue to make home equity payments if you experience an emergency.