5 bad borrowing decisions
By Cheryl Allebrand • Bankrate.com

There are many good reasons to borrow on your home's equity and smart ways to go about it, but in some cases it's always a bad move. Here Carmen Petote, a Certified Financial Planner at Allegiance Financial Advisors in Pittsburgh, helps you avoid these borrowing pitfalls.

5 bad moves with home equity

Borrowing to invest For the tax deduction To defer debt Buying from wish list Bad borrowing

Borrowing to invest. Taking out a loan to invest is not a good idea. "In the late '90s we saw a lot of that and people got really burned. But people tend to forget," Petote says. Of course a caveat is borrowing to start or grow a business, where thoughtful consideration has gone into the expenditure and the borrower is sure the return on investment (ROI) is there. "That's typically the way I see clients use debt to create wealth," he says. Lesson: When the investment itch strikes, scratch with money you've already earned.

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-- Posted: May 21, 2007