I Think Everyone Should Look Into A Home Equity Line Of Credit

[Petunia 100]

Those are extreme scenarios in which HELOC can be used to bail someone out, despite if you are a good or a poor savers. Just because someone is a good saver doesn't mean sh#$ doesn't happen in life.

I changed only one thing, and that is I am not recommending this product to anyone who are looking for free cash to squander (not even a change because I never advertised it in this fashion..it was more of a disclaimer)..which is apparently why so many people on this board are so against HELOC. The tone changed because my initial post had a positive reaction on boglehead..in which everyone here was expecting a blood bath.

You guys are focusing too much on how one can abuse this product and not really looking at why it's really awesome when used in a responsible fashion. I'm surprise a lot of the same people who hates HELOCs doesn't mind reward credit cards..which is way more dangerous if abused (spend $4,000 in the first 3 months and get 40k points!). It's practically a payday loan in your pocket.

I don't hate HELOCs. I had one myself, for many years, when I owned my previous house. I never did use it, but I had it open and available just the same. ( I did decline the Visa which was tied to the HELOC, which struck me as incredibly foolish.)

However, I don't believe they are a solution for living paycheck to paycheck. A budget is the best solution for that.

[Nutria]

Most people are less likely to abuse HELOC because it is tied to their house, and more willing to pay it back. I doubt anyone is willing to give up a house by not paying $93/month.

I remember the 2000s!!!

[disneysteve]

say you have a medical emergency and need 20k

I can't imagine any emergency that would require me to have 20K instantly. Medical bills can certainly hit 20K easily enough but there would be time to get a loan. I'm not saying that having an open HELOC wouldn't be quicker. It certainly would be. But I wouldn't use that as an argument against a HEL.

[Nutria]

I can't imagine any emergency that would require me to have 20K instantly.

Your cousin took a quick trip to Africa, but forgot his passport and now is being held in a Nigerian jail. He sent you an email saying that they require US$20K to free him, so would you please send the money to an intermediary via Western Union?

[DaveInPgh]

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