Community Chat

[LIG1]

[PinkyPetunia]

I had one back in the 1990's when interest rates were sky high so we worked very hard to pay it off fast. We got a statement that there was zero balance due, but it wasn't enough when we went to sell the house in 2005. I needed a certificate or some other document from my lender saying the loan was satisfied.

You do incur closing costs with an HELOC so bear that in mind. Interest rates are low now so that is in your favor. Do you have other savings that could fund the home improvements? Do you think you may have trouble paying off the HELOC? Only you can decide if it makes sense to go forward on it. Good luck.

[Lipstickdiva]

I'm not sure what your age is but we are handling an estate right now at work where the husband and wife had a HELOC. He passed away and the bank called the whole thing due even though she continued to make the payments. Luckily she had the money to pay it off.

[madzonie]

Sometimes, depending on your lender, there are ZERO costs for opening an equity line of credit. We opened one about 3 years ago with our bank (WF) and we incurred no costs whatsoever.

The only costs would have been a $300 charge if we closed the account within the first 3 years, and any interest we might accrue on a running balance.

We used it to build a shop for hubby, but paid it off right away. It was good to have it so we didn't have to take big chunks right out of our savings. It is still open, but with a zero balance.

[esmeraldagooch]

You are playing with fire. Rates can only go up, which could make payments go though the roof. Stop and get a interest rate and lock it in before going any farther. I had relatives who almost lost their home when their variable interest rate hit 21% in the 1980's. They had to sell their home as they couldn't manage the payments which went up hundreds of dollars in a short period of time. The FED can't keep rates low much longer, which is chatted about on many forums and easy to find.

[Irshgrl31201]

No, I would not feel comfortable with that at all.

[gazelle77]

I would not do it unless it was absolutely necessary. What if you or your husband became sick, or died? What if you suddenly could not pay the money back each month?

[KathyPet]

What is the variable rate based on??? This is the most important factor. There are multiple indicators that the rate can be based on. Find out what They are using and then do some on line research to,find out how that rate has varied over the last few years to see what your upper and lower rate could be.

[esmerelda]

I had the same fearful feelings many, many, MANY years ago when we got one. House on the line...horrors!

Relax. You're responsible, or you wouldn't be getting the loan.

Having the fix option is good thinking!

[esmerelda]

On 8/27/2014 bluegrassbaby said:

On 8/27/2014 KathyPet said: What is the variable rate based on??? This is the most important factor. There are multiple indicators that the rate can be based on. Find out what They are using and then do some on line research to,find out how that rate has varied over the last few years to see what your upper and lower rate could be.

Since your post I've rechecked every figure and feel confident about the rate...I've been checking daily for months and months. The loop hole that bothers me more than DH is the bank wanting payment in full if something happened to one of us. I can't seem to get a concrete answer on this from anyone at this point.

See if you can pin them down on that payment point. Have them show it to you...yes or no...in writing. Or get "no" in writing. Or if you both don't already have life insurance, get term insurance for both of you.