Any reason to have a HELOC?

[Anonymous]

Anonymous wrote:Maybe you lose your job and can't find one for another year or two and you need money to live off of, but no one will give you a loan since you don't have a job.

+1 That is what happened to me and now we are in deep trouble. Should have gotten HELOC - have hundreds of thousands in equity tied up in house. Now MoCo taxes HELOCs so I'm even more screwed.

[Anonymous]

Very easy way to access a downpayment if you need to move and want to buy before you sell.

[Anonymous]

Anonymous wrote:They like being in debt.

its only debt if you use the line of credit.

OP, its always a smart idea to take a HELOC but don't use it unless you need to. If you have an emergency or lose your job, you'll be glad you have it!

[Anonymous]

OP - If you don't understand why HELOC is a good idea, you are an idiot.

[Anonymous]

What are the fees involved in getting a HELOC?

[Anonymous]

Anonymous wrote:Very easy way to access a downpayment if you need to move and want to buy before you sell.

This is one of the ways we used ours. My brother who is a CPA/CFP had advised me to open one to have just in case. He said if I needed money for something I could access it without applying for a loan or being able to get a loan at a future date for some readon. Or perhaps you have your money tied up and don't want sell a stock or cash in a high-interest CD. We used it for a car loan that we knew we'd only have for a few months until we had some money available. Then when we were moving out of DC, we bought our new house out of the area before we sold our NoVA home. We used the HELOC as our downpayment. It worked out great for us. They may not be for everyone if you don't trust yourself to not use it as an ATM for thing you couldn't otherwise afford and don't need, but I'm very responsible with money and it served its purpose for us.

[Anonymous]

Anonymous wrote:OP - If you don't understand why HELOC is a good idea, you are an idiot.

how is this helpful to OP? calling her an idiot? is that how you talk to your children and/or spouse?

[Anonymous]

I'll bite. Once we got LTV on mortgage below 50% we got a HELOC and used it to pay off mortgage. So now we have only HELOC. Rate is lower than our mortgage was and we deposit paychecks directly into HELOC and pay expenses out of HELOC.

HELOC is down to about 50k since we started doing this.

We keep no cash on hand. The HELOC is our emergency fund.

[Anonymous]

Anonymous wrote:I'll bite. Once we got LTV on mortgage below 50% we got a HELOC and used it to pay off mortgage. So now we have only HELOC. Rate is lower than our mortgage was and we deposit paychecks directly into HELOC and pay expenses out of HELOC.

HELOC is down to about 50k since we started doing this.

We keep no cash on hand. The HELOC is our emergency fund.

Was it less than 100k?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'll bite. Once we got LTV on mortgage below 50% we got a HELOC and used it to pay off mortgage. So now we have only HELOC. Rate is lower than our mortgage was and we deposit paychecks directly into HELOC and pay expenses out of HELOC.

HELOC is down to about 50k since we started doing this.

We keep no cash on hand. The HELOC is our emergency fund.

Was it less than 100k?

No. it was $400k. And I know the next question - if you use a HELOC to pay off mortgage it's still acquisition debt.

[Anonymous]

Isn't HELOC interest tax deductible only up to 100K? I thought it used to be anyway.

[Anonymous]

Anonymous wrote:Isn't HELOC interest tax deductible only up to 100K? I thought it used to be anyway.

HELOC qua HELOC - yes. But acquisition debt up to fmv of house is fully deductible. Read Pub 936.

[Anonymous]

Very easy way to access a downpayment if you need to move and want to buy before you sell.

yep---that's what we did. I've always kept it. Was very glad I had it in 2008 and it wasn't possible to get one opened then.

[Anonymous]

Anonymous wrote:What are the fees involved in getting a HELOC?

Find a deal where the bank pays all the fees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Maybe you lose your job and can't find one for another year or two and you need money to live off of, but no one will give you a loan since you don't have a job.

+1 That is what happened to me and now we are in deep trouble. Should have gotten HELOC - have hundreds of thousands in equity tied up in house. Now MoCo taxes HELOCs so I'm even more screwed.

Can you explain how MoCo taxes HELOCs?