Comments on: What is a HELOC?

By: Ryan Guina

Ryan Guina — Tue, 17 Apr 2012 17:26:53 +0000

Lisa, I recommend working out your marriage issues before making any other major financial decisions, as things may be different depending on whether or not you and your husband go through with the divorce. Typically, though, I would rarely recommend getting a HELOC to pay off consumer debt because if you default on your HELOC, you could lose your home. It may also make selling the home more difficult, particularly if you are already underwater on your mortgage.

By: lisa ramos

lisa ramos — Tue, 17 Apr 2012 16:22:48 +0000

Would you advise getting an HELOC to pay off a debt? Currently going through a divorce, and trying to sell our home to pay off debt. However, it’s not a seller’s market and we hate to sell for so much below assessed value. We are contimplating getting back together, keeping house, and getting HELOC to pay off debt. We are 12 years into a 30 yr mortgage, and the debt is $14,000. Would we run into complications with HELOC if we decided to sell in future? Thanks…

By: RB @ RichBy30RetireBy40

RB @ RichBy30RetireBy40 — Wed, 29 Jul 2009 03:57:12 +0000

Hey Guys – I wanted to share with you my HELOC philosophy. Essentially, we need it, and we need to spend all of it!

I think you’ll find the post intriguing.

http://www.richby30retireby40.com/2009/07/go-broke-to-win-big-heloc-edition.html

By: Ryan

Ryan — Sun, 27 Jan 2008 18:58:46 +0000

I’m glad that worked out for you! I’m not sure it would work for everyone’s situation, but obviously that was a wonderful opportunity for you.

By: Kristin

Kristin — Sun, 27 Jan 2008 18:53:07 +0000

I used a HELOC to pay off my home mortgage! WAMut first called me to re-finance. Their new rates were slightly lower than my loan, but I had plans to pay it off early and when I ran the numbers it just was not worth the paperwork. WAMut called back and suggested paying off my mortgage with a HELOC over 2.5 pts less than my loan – I took it and paid it off before the rate climbed back to my original mortgage rate.

By: FourPillars

FourPillars — Sat, 26 Jan 2008 18:37:11 +0000

it’s like using a backhoe to plant a tulip bulb.

Hey, if the tulip bulb is big enough…?

By: Ryan

Ryan — Sat, 26 Jan 2008 17:38:46 +0000

LOL – agreed. Great analogy.

By: Ryan

Ryan — Sat, 26 Jan 2008 17:02:44 +0000

Ron, You’re right. Lenders will almost always give you the maximum number you can afford to borrow, rather than a prudent amount you can borrow. The problem with that scenario is that it doesn’t give you any room for other expenses. I think a HELOC can be a good tool if used properly, but usually there are better options.