Home Equity Lines of Credit (HELOCs) operate with a prime rate and typically maintain a low loan-to-value position. However, it's crucial to note that the interest rates associated with HELOCs are often higher than those of renovation loans. One significant concern with HELOCs is their notable failure rate, primarily due to the substantial risk of overspending. These credit lines can lead to financial challenges, especially if individuals do not exercise prudence in managing their expenditures. Additionally, HELOCs may feature an interest-only period, which, when it transitions into a full principal and interest payment, can pose affordability issues for borrowers. This potential mismatch between the borrowing capacity and the ability to meet increased payment obligations can contribute to financial strain and, in some cases, result in difficulties in repaying the borrowed amount. It underscores the importance of careful financial planning and consideration of one's ability to manage the evolving terms of a HELOC to avoid potential financial pitfalls.