Should You Borrow Against Your Home to Pay for Your Wedding?

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Weddings are expensive. But read on to see why using home equity to pay for one may not be your best bet. 

The Knot says that the average cost of a wedding is $30,000. If you’re lucky, you might have generous parents or soon-to-be in-laws who can help you foot the bill for your big day. But if you and your partner have to pick up the tab on your own, you may be wondering how on earth you’re going to pull off your dream wedding.

Some people take out personal loans to cover their wedding expenses. Others whip out a string of credit cards and hope for the best.

But if you happen to own a home, there’s another option you can look at — borrowing against the equity you have in your property via a home equity loan or line of credit (HELOC). Doing so might be your most affordable bet in the context of borrowing for a wedding. But it’s a move you might also end up regretting.

The danger of borrowing against your home

Any time you’re tempted to borrow money, whether for a big event like a wedding or something less expensive like new dining room furniture, a home equity loan or HELOC can seem like a good bet. That’s because home equity loans and HELOCs are generally pretty easy to qualify for if the equity in your home is there and your credit score is in reasonably good shape.

Plus, you might snag a lower interest rate on a home equity loan than a personal loan. The reason? Personal loans are unsecured, so lenders take on a lot of risk when they give them out.

With a home equity loan, your loan is secured by your home itself. Your lender is protected because if needed, they could force the sale of your home to get repaid should you fall behind on your obligation.

But it’s for this very reason that you may want to think twice before tapping your home equity to cover the cost of your wedding. You may not have a problem borrowing that money — but it may not be so easy to pay it back. And the last thing you want is to start off your marriage with the threat of foreclosure looming over you and your future spouse.

Consider scaling back

Getting married is something you may only end up doing once. So it’s easy to see why you’d want your big day to be perfect.

But taking on debt to throw a wedding could put a strain on your marriage early on, and that’s not something you want. It might also make it difficult for you and your partner to meet other financial goals. So before you borrow against your home to fund your wedding, consider ways to make it a less expensive affair.

For one thing, consider trimming your guest list. It’s nice to invite distant cousins and old friends from college. But if these are people you don’t see or speak to regularly, you may not want to pay to have them join you.

Next, think about the aspects of your wedding that are most important to you and eliminate things you can live without. You may have dreamed of dancing to the tunes of your favorite local jazz band. If that’s extremely important to you, pay their fee. But then find something less expensive than flowers to use for centerpieces if you don’t care about that as much. Or, skip the centerpieces altogether.

Another way you can save some money? Send an electronic invite rather than formal invitations in the mail. It might even make life easier for you and your guests.

Borrowing against home equity is an option you may want to pursue if you have a wedding to pay for. But before you sign a home equity loan or tap a HELOC, think about the risks involved, and ask yourself if ongoing debt is really worth a one-time celebration.

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