 TITLE: Should I Use Home Equity for a Financial Emergency? CONTENT: Other Ways to Find Cash in a Financial Emergency\n------------------------------------------------\nBefore turning to your home to finance a financial emergency, explore all alternatives. Review your budget carefully. If you can pare down your expenses to the most basic for a period of time that enables you to pay for the emergency expense, do it. It will prevent you from using your precious equity, which you may want to utilize later for another purpose or simply keep accumulating.\nAlso explore ways to increase your income. If you can earn enough money quickly, you won't have to borrow from your home or reduce an already trim budget. Look into getting a second or part-time job. Or maybe you have electronics, sports equipment, a second car or valuable jewelry that you can sell and use for the emergency expense.\nA credit card, too, can be preferable to tapping home equity. As long as you pay the debt off quickly, the financing fees shouldn't be too high. A $5,000 charge with a 19% APR (annual percentage rate) and payments of $670 will take you eight months to pay and cost $362 in interest. Even better is a new credit card with a promotional rate of 0% APR for six months or longer. If you pay it off within that time frame, it's a free loan.\nIf creditors are breathing down your neck and that's your financial emergency, take heart. Many issuers are willing to offer concessions to valued good cardholders, especially if they reach out before the payment's due date. Try to work out a hardship plan where you suspend payments for a few months instead. Trading unsecured credit card bills or collection accounts for a liability that is secured by your home could leave you without a place to live.\nIt's always a wise idea to carefully weigh whether you truly need something before you spend the money, but it's essential when considering using your home's equity. Don't take a hammer to this particular piggy bank unless you're sure it's worth the risk and costs. END