Home Equity Loan/line of credit (1 Viewer)

[Caesar]

I know this won't apply to most FBG;ers, but I've always been below average.  Been doing some home improvement projects, and still have some more to go.  Put some on the CC along with costs of bringing in-laws to the USA, additional insturance, and other things.  I haven't carried a balance on a credit card in over 15 years, so its making me a little nervous to have a balance.

I still have a list of immediate things I want to do to the house, plus looking to extend my in-laws here, and adopt my two step-kids (filing on my own.  No issues with birth father).

Anyway, looking into taking a little money against equity in the house(s).  I would like to have about 20% of what I have in equity across two homes.   Any thougths or suggestions?

 

[tommyboy]

Borrow only as much as you know you can pay it all back within 5 years. Easiest way is a line of credit but you can also do a cash out refi.

Before you do any of this ask yourself if it's a need or a want.  If it's a need spend wisely. If it's a want, pay cash.

 

[belljr]

HELOC are my go to emergency fund.

I have one that rarely has a balance on it but is there.

That reminds me mine is ending soon and I may need to reopen one.

I use it for short term spending if I need it.

Also if you accumulate > $500 interest it's tax deductible

I accumulated $8 last year!!!!

Will probably use it for my deck next year

 

[Chadstroma]

You mentioned two houses. Lowest cost will be on the primary residence. 

Most banks/credit unions will give best rates at around 70-80% CLTV (Combined Loan to Value). 

I would get the most like you can get while getting the best rate. Even more so for home improvement projects which tend to cost more than you thought and lead to other projects you want to do as well. 

Any specific questions... feel free to ask. 

 

[Chemical X]

you can also borrow against your 401k and pay yourself the interest..........I believe home improvement loans get up to 10 year repayment (with documentation), others get up to 5, but don't quote me on that.

 

[Thorn]

you can also borrow against your 401k and pay yourself the interest..........I believe home improvement loans get up to 10 year repayment (with documentation), others get up to 5, but don't quote me on that.

whoops

 

[Uruk-Hai]

you can also borrow against your 401k and pay yourself the interest..........I believe home improvement loans get up to 10 year repayment (with documentation), others get up to 5, but don't quote me on that.

I've had more than one of the big boys managing my 401k and all have capped loans at 5 years. 

 

[skol asylum]

I did a 401k loan to help buy my house. I could have done 10 years but I wanted to pay it off quicker so I did 5.