One of the things I’m trying to weigh now is the various options and considerations of a home equity line of credit.
- Should I get one with Wachovia (my existing bank) so I can make it an overdraft-protection mechanism?
- If not, should I consider moving my existing checking account? (I checked, and there’s ~16 entities that are tied to that particular account, either putting in like direct deposit, or taking out like my mortgage company)
- Should I focus mainly on the actual rate, even if I don’t plan on using this home equity line of credit except or emergencies? Since the default seems to be something based on prime (or some offset thereof), is it worth haggling over a 0.25 point difference, for instance, if I’m expecting prime to keep shooting up towards 10?
- The Bank of America offer (constantly linked from BankRate) highlights “no fees!” – should I really expect fees in the process from other places? Places like this 1992 FTC article on our friend the home equity line of credit seem to indicate so, but it’s outdated in a lot of other ways, too (like 85% of home value for the max amount instead of the 125% we’ve all seen offered in various places)
- Are the scams the FTC warn about for a home equity loan equally valid to a home equity line of credit?
- The “Section 32″ protection against home equity loan scams seems helpful to know – are there similar issues to try and keep in mind for a home equity line of credit?
- The FTC is on the same bandwagon as Clark Howard in terms of treading carefully (or just not doing it) for the path of a home equity line of credit (or home equity loan for that matter) since you could lose your house. Is it worth reconsidering whether to do this at all? (Personally, I’m going to do it anyway on the thought process that yes, Virginia, it’s really for emergencies and emergencies only)
Any advice? If you happen to run across this and have a home equity loan or home equity line of credit, is there any advice you would give to others?
“One of the things I’m trying to weigh now is the various options and considerations of a home equity line of credit.”
Whichever HELOC gives you the most flexibility (online banking, debit card, etc.) would be the one to choose. Also, one which is an interest-only HELOC.
Folks are using HELOCs these days to accelerate the equity in their home and thereby save tens (even hundreds) of thousands of dollars in interest payments.
Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit (HELOC) to ‘power’ this ‘financial solutions’ program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where this particular program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or make (little or no) adjustments to their lifestyle.
I’d be happy to provide further details…