Your home is an important asset that has the potential to build equity over time. Ironically, that equity often represents a financial resource with no return. So if you have other debts that you could restructure into a better rate that is tax deductible, using your home equity for debt consolidation makes a lot of sense.
Why pay 15% – 25% on a credit card when you can pay 5% or less? You can increase your cash-flow, improve your credit, and potentially increase your tax deduction! The savings are huge.
It is very true that you should not use your home equity as a credit card to create a false sense of wealth. However, if the debt is already there and you have available equity, a debt consolidation strategy through a refinance may be the best move to make.