Home Equity Line Of Credit Puns

We’ve owned home since 2017. Hoping to update and furnish 900sq ft basement and do some exterior work. Thanks!

My elderly parents are now in their early 70s, they each currently receive about 1200$ every month from the federal and provincial (Quebec) retirement programs and a small amount from my dad's RRSP (I believe it's only about 300$ per month), they had paid off their house around 10 years ago while my dad was still working. I found out that my mom took a HELOC and has 70 000$ (the interest is about 2.45%) on it so far, she used it to to pay for some repairs to the home but also to pay for some day to day things, notably storage unit for mostly useless stuff that is going at about 700$ per month, she has had this unit for about 9 years. When I found out about the HELOC, I offered to help clear the storage unit to try to get rid of it as soon as possible. They also own three used cars, which I suggest they sell two and keep only one.

I tried to do an evaluation of their expenses, including the storage unit and saw that they were around 400$ in debt each month (a little bit more counting the interest of the HELOC).

I'm really wondering what I could do, should I give them money to help pay back their loan (I could do somewhere around 600$ per month) or would it be better if I were to buy the house from them, there just seems to be a lot going through my head now. Their home is worth around 350 000$.

Thanks for your advice..

Link: https://www.cnbc.com/2020/04/30/wells-fargo-says-it-will-no-longer-accept-applications-for-home-equity-lines-of-credit.html

• Wells Fargo, one of the largest home lenders in the U.S., said it it stepping away from the market for home equity lines of credit because of uncertainty tied to the coronavirus pandemic.
• “Wells Fargo Home Lending will temporarily stop accepting applications for all new home equity lines of credit (HELOCs) after April 30,” the bank said in a statement.
• During tough economic times, HELOCs are riskier products for banks because in a foreclosure, the lender who made the primary mortgage is first in line to get paid in a recovery.

Hello Everyone,

I'm in the optical business, and this will be my first business venture. I have a dream of starting my own optical dispensary, but financing has been a challenge. I do own my property with approved HELOC of $100,000. Based on my calculations that is a good amount of capital to start the business.

I do understand that we are in difficult economic times, and I'm setting up my finance for when things get better. What are your opinions on using HELOC to finance a brick and mortar business? What other financing options is avaible to someone like myself?

Thank you in advance!

I bought my home outright, all cash. I had the funds from a co-owned home that was sold so I just dropped it into the new one. My home is 2,400 square feet with four bedrooms and two bathrooms on a 2 acre lake front property. I paid $155,000 and it was estimated at $180,000. Husband doesn't work due to health issues and is not on disability. I live close to a state University and would like to rent rooms to college students, but I need to fix the plumbing in the main bath first. My car is on the fritz and I have about $7,000 in outstanding debt. Credit score is only 530. I work full time, 40 hours a week and after taxes and insurance, I bring home about $1,400/month. Renting three bedrooms I could bring in up to $1000/month more. My only real option for getting the funds to fix the plumbing issue, my car and wipe out that debt is putting the house up as collateral. As soon as the plumbing is fixed I can start renting out rooms and generating some other income. Kinda need the car for driving to work. The debt could wait, but I hate it hanging over my head. What are some pros and cons for a home equity line of credit? Does anyone here have experience with it?

I'm thinking of getting a HELOC for an income producing investment. Based on my knowledge the interest payments on your HELOC that was used to purchase an investment property is tax deductible. Are there any other ways to utilize a HELOC where it is tax deductible. It is really appreciated! I live in Canada btw but there are probably a lot of similarities with the states which is what a lot of websites are based of off.

I currently owe about 30k on my house and it’s worth about 110k. I am going to borrow from the equity I have in my house. What is the advantage/ best option to go with between a equity line of credit vs a equity loan. I have excellent credit so I know I’ll get a good interest rate. Was also considering refinancing before doing this. Second question, out of this money I will be getting, I owe my bother 40k of it.. it’s for our family members house we will be inheriting. Is there. Clean way for me to give him this money without him having to pay taxes on it? I believe he wants to use to to pay off debt.

https://www.marketwatch.com/story/lax-standards-for-home-equity-lines-of-credit-repeat-bubble-era-madness-2019-05-06

This was a particularly powerful takeaway for me on where we're at:

"Since non-bank lenders don't take deposits, they are forced to use lines of credit obtained from banks to provide funding for their loans. In a housing downturn or liquidity crunch, the banks could pull the line of credit and essentially put the non-banker lender — large or small — out of business."

A lot of people have been using HELOC for a variety of reasons. Whats interesting is that there is a change in how much these make sense purely dependent on interest rates and housing prices (these 2 are also directly correlated)

Scenario 1: HELOC make sense for things like reno's when housing values are going up. If housing prices are to go down, it will be financially analogous to buying new rims for your car

Scenario 2: HELOC are nice way for older folk to have cash now while living in your million plus detached Vancouver/Toronto house without selling it, again when property prices are going up. They appear to be reckless when property prices decrease.

Scenario 3: HELOC used as downpayment for homeowners children. When housing prices go up, their children have an asset that has aprpeciated in value; the fact that their children can afford such an asset also helps the entire market go up. When housing prices go down, their children are on the hook on a depreciating asset that they otherwise couldn't afford with an HELOC. Parents also exposed due to taking out that HELOC, and their house is also worth less.

etc etc...

Bottom line: HELOC will multiply the pain as housing prices go down and interest rates go up. I think we will be blindsided to their cascading effects. Any thoughts? Do u or people you know have an HELOC? How do they/you use it?

Checked with my bank and their rates are garbage (Citizens Bank). Figured one of you might have an amazing credit union or something that offered you a great rate.

Thanks!

Ok. So, we don't have an emergency fund. We have an unexpected need to borrow +/-$6,000 to replace the decking on our 25 year old roof - in addition to the shingles that insurance is covering for storm damage.

We may not have an emergency fund but overall we're pretty frugal? We owe $135,000 on a home we can easily sell for $220,000. It's waterfront property in lake country. We have $4000 left on a credit card that we have been steadily paying off for the past two years, no other debt or payments, and have steady incomes though I work only part time.

Finding other part time work would be a challenge - but doable. I prefer to work part time until my kids are through school. Being home for them is important to us. We took a vacation two years ago on a whim with our teenagers and those memories are worth the emergency fund we no longer have.

So, we need $6,000 now. We're looking at "products" and easily qualify for a "$10,000 Line of Credit 20-year interest only" loan at 8.75% (variable!) The credit union that we have our mortgage through is the only place we've looked. We like this LofC option because we're not sure about the exact amount we'll need right at the moment. It's been a challenge to find contractors willing to replace our roof and skylights. Bids are super high and beyond what insurance will cover. The credit union only offers equity loans in $10,000s. The fixed rate $10,000 doesn't make sense to us because we don't need to borrow that much.

Is this the best way to go about this? Would it be better to do the fixed rate for $10,000 and replace windows / finish the landscaping too? We plan to pay off the loan within two years. However, with our kids going off to college soon - who knows? That's a whole other thing - though we've saved enough in 529s to feel confident that their college will not impact our resources this is a huge unknown. Fixed $10,000 vs. Line of Credit $6,000+ with variable interest?

Looking for advice. Thanks!

Update: Thanks for your help! We looked into a similar option at our locally owned small bank and they gave us a much better deal. We paid $287 to close on a $20,000 LofC at Prime +0%. It took less than 2 weeks and we have the cash in hand to pay for the repairs - literally an account just sitting there with $20,000 (super scary). Now to secure the contractor for dates and begin a plan to pay it off. Will stop our extra $200 to the mortgage principal to help with this and may roll our CC ($4,000) over also. 5.5% i

Not sure how to begin this post so ill just start with the details.

I'm looking to buy a home valued at 405,000$ for 360,000$. I have a down payment of 72,000$ (20%). I work full time and have a part time job as a volunteer firefighter.
I made 8,575$ + 40,827$ in 2018.
I made 5,516$ + 5,436 $ + 6,535$ in 2017.

I'm discussing with TD bank what my options are and more than one person has suggested a home equity line of credit.
Its been explained to me a few times but i still dont really understand the difference or what would be better for my situation.

Trying to figure out which is best. I’m wanting to get a couple projects done around the house this year. From what little research I’ve done, cash-out seems the better option. Looking for input from more savvy redditors.

To keep this short and simple... I have a rental property with a decent amount of equity in it and just signed an agreement to purchase a primary residence.

I was advised to pull all the equity out of my rental and put it down on my primary residence. This is a new idea to me but it makes sense the way it was explained. Basically I would increase my mortgage payments on my rental (which is break even right now) but lower the payments on the primary. Idea behind this is that my interest on the rental can be claimed for taxes and I will be making the same payments in total between the two properties.

Am I understanding this correctly? I was basically laughed at for not considering it in the first place lol. Is this something investors typically do? Will it help with capital gains when I eventually sell my rental?

Any input is greatly appreciated as I am not very financially literate.

I'm working with a credit union to consolidate about $30k of credit card debt, and they've presented two options:

1. Personal loan, 8.5% interest, monthly payments of ~$620 for 5 years
2. Home equity, fixed 5.5%, monthly payments of ~575 for 5 years

Option 2 would save about $2600 in interest over the life of the loan vs. option 1, so it's the route I'm thinking about taking. Am I missing anything, or is option 2 the obvious choice here? Thanks in advance for your advice and opinions!

Good morning , I have a HELOC I do not include in YNAB but the other day I used it for the first time sense starting YNAB. I rote a check for $3000 cor a car my kid is paying half for. She will transfer the $1500 to my account and I will then send it off to the HELOC. Should I even bother bringing in the HELOC to YNAB? In the future after I crush the credit card debt I plan to work on getting the HELOC paid off.

Long story short Father passed away recently and I have done all the paperwork to get the house transferred into my name legally but I have a quick question in regards to his HELOC that was taken out quite a long time ago.

Seeing that the house is collateral for the line of credit am I forced to refinance this into to my name seeing I own the property, or am I being manipulated into taking on the debt?

I have a meeting later on in the week to parlay further, would just like some third party input on my situation and maybe see a few more options.

Other details that may help:

• I have the ability to pay it off in full
• I have a steady job and have no issue making ends meet
• I current have a mortgage I am in the process of getting transferred into my name for the property (I wish to keep the house)