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csorisi
My 2 LOVES
Member since 11/05 1984 total posts
Name:
Corinne
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Re: Is a Home Equity Line of Credit a good idea?
Instead of a HELOC have you looked into a Home Equity Loan which is usually a fixed rate. We had a HELOC when we bought our house and the interest rate was over 9% after our first payment. After 8 months we went to Commerce and got a fixed home equity loan at 6.74%. We only had to pay a $90 application fee. This might be the better way to go as then you will always know what your payments are per month.
Even if the rates right now for the HELOC look very promising they can shoot up and usually change from month to month. The other thing is that I have seen alot of people pay off their credit cards with equity in their home and then turn around and get themselves in even more debt.
Good luck
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Posted 5/15/07 7:39 PM  |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Is a Home Equity Line of Credit a good idea?
Posted by csorisi
Instead of a HELOC have you looked into a Home Equity Loan which is usually a fixed rate. We had a HELOC when we bought our house and the interest rate was over 9% after our first payment. After 8 months we went to Commerce and got a fixed home equity loan at 6.74%. We only had to pay a $90 application fee. This might be the better way to go as then you will always know what your payments are per month.
Even if the rates right now for the HELOC look very promising they can shoot up and usually change from month to month. The other thing is that I have seen alot of people pay off their credit cards with equity in their home and then turn around and get themselves in even more debt.
Good luck
I just went online and spoke to someone at chase who told me they have fixed heloc's.
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| Posted 5/15/07 9:17 PM |
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Eleanor
LIF Adult
Member since 2/06 2223 total posts
Name:
Ellie
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Re: Is a Home Equity Line of Credit a good idea?
Posted by lorich
Posted by Maathy317
I'm going to be the one in the minority here. A credit card is unsecured debt. A home equity line of credit is a secured debt. No one knows what the furture will hold. If anything happens and you are unable to pay the HELOC, your house is on the line because that is what you use as security. The economy is good right not, but, could take a turn at any time. For me, my house is something I wouldn't take a chance with.
I agree.
I totally agree! Especially if you are taking out a large part of your equity. If you don't pay your credit cards - you lose some credit score; if you can't pay your HELOC you can lose your house. The tiny tax deduction that you get just doesn't make it work IMO.
I would make a list of all the credit cards, balances and interest rates. Get a 0% CC (at least a year and hopefully no transfer fee) and transfer your highest interest rates. Then pay just minimums and put the rest of the money to the highest interest rate card.
Honestly - if you have CC rates over 20%, I'm not sure I would take the risk with a HELOC. JMHO
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| Posted 5/25/07 9:19 AM |
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MrsBlueSash
Love my sailor
Member since 6/05 5793 total posts
Name:
Christian
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Re: Is a Home Equity Line of Credit a good idea?
Posted by Beth1210
I never think it's a good idea to pay off credit cards with your house- but that's just my opinion
I think it should be used to add value to the house- not take equity out
I agree.
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| Posted 5/25/07 10:01 AM |
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JenniferEver
The Disney Lady
Member since 5/05 18163 total posts
Name:
Jennifer
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Re: Is a Home Equity Line of Credit a good idea?
I was going to say the same thing as Maathy. It sounds good and for some peole it really can be good, but you never know what's going to happen. If you don't pay your credit cards, they are unsecured. they can mess up your credit rating, but they can't take anything from you...once you take out a HELOC, it's secured by your home, so they can then take your home. That's a big difference, and something to really think about. COnsider a low interest balance transfer or a consolidation loan as well.
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| Posted 5/25/07 10:17 AM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Is a Home Equity Line of Credit a good idea?
Posted by Eleanor
Posted by lorich
Posted by Maathy317
I'm going to be the one in the minority here. A credit card is unsecured debt. A home equity line of credit is a secured debt. No one knows what the furture will hold. If anything happens and you are unable to pay the HELOC, your house is on the line because that is what you use as security. The economy is good right not, but, could take a turn at any time. For me, my house is something I wouldn't take a chance with.
I agree.
I totally agree! Especially if you are taking out a large part of your equity. If you don't pay your credit cards - you lose some credit score; if you can't pay your HELOC you can lose your house. The tiny tax deduction that you get just doesn't make it work IMO.
I would make a list of all the credit cards, balances and interest rates. Get a 0% CC (at least a year and hopefully no transfer fee) and transfer your highest interest rates. Then pay just minimums and put the rest of the money to the highest interest rate card.
Honestly - if you have CC rates over 20%, I'm not sure I would take the risk with a HELOC. JMHO
Our rates are 0%, 9% and 13%. The heloc is 8% and it will free up money to not charge again.
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| Posted 5/25/07 10:14 PM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Is a Home Equity Line of Credit a good idea?
Posted by JenniferEver
I was going to say the same thing as Maathy. It sounds good and for some peole it really can be good, but you never know what's going to happen. If you don't pay your credit cards, they are unsecured. they can mess up your credit rating, but they can't take anything from you...once you take out a HELOC, it's secured by your home, so they can then take your home. That's a big difference, and something to really think about. COnsider a low interest balance transfer or a consolidation loan as well.
The bill will be less each month than the cc's and we will be able to save money instead of putting things on the cc.
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| Posted 5/25/07 10:14 PM |
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charon54
My two boys!
Member since 5/05 7279 total posts
Name:
Rebecca
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Re: Is a Home Equity Line of Credit a good idea?
I think it makes sense. DH's parents did the same thing a few years ago. Now they pay less per month and can save money. If you need help, FM me, DH works for Wamu and can help you decide what kind of loan to get.
We have one where you can fix the rate.
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| Posted 5/26/07 10:05 AM |
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hazeleyes33
LIF Adult
Member since 5/05 13060 total posts
Name:
Ginger
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Re: Is a Home Equity Line of Credit a good idea?
Posted by charon54
I think it makes sense. DH's parents did the same thing a few years ago. Now they pay less per month and can save money. If you need help, FM me, DH works for Wamu and can help you decide what kind of loan to get.
We have one where you can fix the rate.
Thanks so much!
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| Posted 5/26/07 12:49 PM |
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CaseyGirl
Mommy to 3 Boys :)
Member since 5/05 19978 total posts
Name:
Jen - counting my blessings...
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Re: Is a Home Equity Line of Credit a good idea?
We took one out to pay off some debt. The interest rate is lower than the CCs and now we make 1 monthly pmt instead of a bunch of pmts to different companies. Works for us. We use Bank of America (our bank for checking etc too)
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| Posted 5/26/07 1:24 PM |
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