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

[rennigade]

Im going to copy/paste op's original post over at bogleheads and see what they have to say. Ill post a link so everyone can sit back and watch the blood bath.

[disneysteve]

Im going to copy/paste op's original post over at bogleheads and see what they have to say. Ill post a link so everyone can sit back and watch the blood bath.

LOL. That should be entertaining.

Be sure to also include the part about unemployed people with no savings using a HELOC to pay their mortgage.

[Singuy]

Sorry, you don't get to make up a "disclaimer" after you've already posted stuff that directly contradicts this.

Now you are saying that only "savvy investors/savers" should take a HELOC but the very title of this thread suggests that "everyone" should consider a HELOC. Then you go on to say, " if people are living paycheck to paycheck, they can't really tap into their retirement account and their EF is abysmal...I feel like Heloc is their only saving grace". Do you mean to say that folks living paycheck to paycheck with an abysmal EF would qualify as savvy investors/savers who should consider a HELOC? Not to mention the fact that those paycheck to paycheck folks probably wouldn't even qualify to get a HELOC.

I think you need to give it up and move on.

My first post is still valid. None of the reasons I gave were "use Heloc to pay for your vacations and home remodeling!".

I was merely saying the product is fantastic only if you are willing to use it responsibility. I never even thought about putting my house on the line for some vacation or using it as a piggy bank for daily expenditures. Maybe that's something people want to do and if that's the case, stay the heck away from this.

Since I hated front loaded interest rate payments, I paid off my house 23 years early. Without HELOC, I wouldn't be in the spot I am in today, so for me it's a fantastic product! There are many incentives in life where cash is king. Sometimes you don't want to pull money out of long term investments, especially if you want to use the money for something short term...that's where HELOCs shine.

Well, I see the value in this which grew my net worth by 350k..if you guys all think it's a demon's curse then just forget about this thread.

[rennigade]

https://www.bogleheads.org/forum/viewtopic.php?f=1&t=194337

The discussion has been really positive in favor of heloc's...assuming the user is responsible.

[corn18]

Yup. Bogleheads approve.

[bjl584]

https://www.bogleheads.org/forum/vie...p?f=1&t=194337

The discussion has been really positive in favor of heloc's...assuming the user is responsible.

A HELOC is like any other line of credit except your house is collateral if you don't pay.

Used responsibly, I don't have an issue with them. I have a HELOC, and I'm just fine financially speaking. Of course, I don't treat my house like a cash register either.

I think they can be a useful tool if used responsibly. Just like a credit card can be used responsibly. It doesn't have to be the Dave Ramsey "all credit cards are bad and evil no matter what, no exceptions" philosophy.

[dawnwes]

That is one thing I am really proud of. We have never taken any vacations or done any home remodeling that we couldn't pay in full with cash. We took advantage of some 0% same as cash offers, but never without having the cash in the bank to pay it off.

That is what we have always done in the past.

Until we decided to finish up everything so we could move.

Now we aren't moving.

But we should be able to pay it off within the next year, esp if I get a job.

[disneysteve]

A HELOC is like any other line of credit except your house is collateral if you don't pay.

Used responsibly, I don't have an issue with them.

I agree completely. Borrowing against your home equity can be a wise move if done responsibly. I have no issue with that. We have taken a home equity loan ourselves years ago to pay off some higher interest debt and I would do it again tomorrow given the same circumstances.

My issue in this thread is how having a HELOC has been promoted. A lot of misinformation and poor advice was given in my opinion.

[tripods68]

if you guys all think it's a demon's curse then just forget about this thread.

100% agreed!

I've been saying this all along to close this thread...

[AJ444]

I had one and used it earlier in my life but don't have a need for one right now. I agree it can be used responsibly.

[bjl584]

My issue in this thread is how having a HELOC has been promoted. A lot of misinformation and poor advice was given in my opinion.

I agree with you that OP acted like a salesman working for Wells Fargo. Pitched to the wrong crowd, it could get people in trouble. Pitched here, it's going to get a lot of resistance.

[Jluke]

Sorry, you don't get to make up a "disclaimer" after you've already posted stuff that directly contradicts this.

the appropriate disclaimer for Singuy might have been that his combined yearly income is 250k plus...

[TexasHusker]

I agree with the OP. Your home equity could be the finance vehicle to fund your dreams.

As I have mentioned previously, I have used real estate equity to fund the start-up of two businesses that combined produce about $300K a year in income. I long-since paid off those loans, obviously.

Additionally, I have used equity to buy more income-producting real estate.

I'm a big believer in home equity loans. It's the cheapest money there is, other than what is sitting in your own bank account.

[TexasHusker]

Your home should be viewed as your place to live, it should not be thought of as your bank.

Disagree. All assets are my bank.

[Singuy]

I agree with the OP. Your home equity could be the finance vehicle to fund your dreams.

As I have mentioned previously, I have used real estate equity to fund the start-up of two businesses that combined produce about $300K a year in income. I long-since paid off those loans, obviously.

Additionally, I have used equity to buy more income-producting real estate.

I'm a big believer in home equity loans. It's the cheapest money there is, other than what is sitting in your own bank account.

Everyone is so black and white here. You point out some advantages of a product that literally have no disadvantages unless you abuse it and all of a sudden people jump down your throat.

At least it's boglehead approved.