Paying interest only on HELOC?

[Nutria]

Is it really common for people to do this for a decade??

[bjl584]

common? maybe.

smart? no

A HELOC can be a good way to pay off debt if you are responsible with it and don't run it up so high that you don't have any equity left in your house.

I had a HELOC with my old house. At the time, I had some debt hanging out there, so I consolidated them to a HELOC. I had to pay back the debt anyway. I figured I might as well write the interest off on my taxes while I did it. The strategy worked fine for me. But, I was responsible with it. I used it one time and then that was it. I didn't use it like a revolving line of credit. I think that's where a lot of people get in trouble. It's not free money. And, if you plan to sell your home in the next few years a HELOC may not be the best idea. The balance has to be settled at closing. You could end up walking away from the sale with nothing in your pocket.

[Nutria]

common? maybe.

smart? no

A HELOC can be a good way to pay off debt if you are responsible with it and don't run it up so high that you don't have any equity left in your house.

We're going to use it for home improvements.

And, if you plan to sell your home in the next few years a HELOC may not be the best idea. The balance has to be settled at closing. You could end up walking away from the sale with nothing in your pocket.

Very interesting!

[97guns]

I'm not a fan of interest only loans or taking a mortgage from gained equity, my cousin has refi'd several times, takes the equity from the property gains and buys things like furniture, carpeting, motorcycle, etc... all its done is ensured that he will work into his 80's and most plausiby never ever retire

I am in the camp of building equity in property as a way to wealth, you use any gains with any investment to make more money by parlaying investments, if you use gains For frivilous spending your not getting anywhere, I've seen it this kind of investing success and demise many times over with my family

[Nutria]

if you use gains For frivilous spending your not getting anywhere, I've seen it this kind of investing success and demise many times over with my family

Well, needed home repairs & refurbishment aren't frivolous, so don't worry about us on that score.

Choosing the wrong people to do the work is a much larger hazard.