Why Taking Out a HELOC to Invest Is a Risky Game

Real estate prices have been climbing, and some folks got the bright idea to tap their home equity—basically borrowing against their house to throw money into other investments or pay down debt. Enter the HELOC (home equity line of credit), and Dave Ramsey’s calling it “stupid.”

Here’s the thing: when you use a HELOC, you’re literally putting your house on the line. If your investment tanks or the market turns south and you can’t pay back what you borrowed, boom—foreclosure notice.

The core problems?

You could lose your home. Your house isn’t just an asset—it’s probably your biggest one. Using it as collateral means one bad investment call away from losing it all.

Variable rates are brutal. You lock in at one rate, then rates climb, and suddenly you’re bleeding money on interest. The whole thing becomes a financial headache.

You’re still drowning in debt. Moving debt around doesn’t make it disappear. Ramsey’s whole philosophy is simple: get to 100% debt-free. A HELOC just shuffles the problem.

Stress multiplies. Complex financial moves breed complex problems. You’re not just managing one investment—you’re sweating about rates, repayment schedules, and what happens if the market dips.

You’ll overspend without realizing it. HELOCs give you easy access to cash, and before you know it, you’ve borrowed way more than planned. The bill comes due and suddenly you’re scrambling.

Emergency funds exist for a reason. Using a HELOC as a safety net for unexpected expenses? That turns a crisis into a catastrophe—now you’re stuck repaying variable-rate debt on top of the emergency.

Bottom line: Your home should stay yours. Period.