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Old 08-24-2019, 04:48 PM   #1 (permalink)
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HELOC here we go again

I now see commercials for home equity lines of credit again

I guess we didn't learn our lesson the first time. Sadly I think we are going to crash again. I hope not though.
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Old 08-24-2019, 04:51 PM   #2 (permalink)
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Its more the subprime loans that should bother you. Or states value loans.
Home equity lines of credit are not a problem if used responsibly, ie cashflow management on a big project such as remodels. Not such a good idea if you just want to buy or build a toy...


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Old 08-24-2019, 05:35 PM   #3 (permalink)
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How do helocs work? Just a fancy credit card that uses your house as collateral? Are they low intrest? Does it matter if you own your house outright?
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Old 08-24-2019, 05:43 PM   #4 (permalink)
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Ad on the radio said take home 350 a week approves a 30k auto loan.

Always works in cycles. Short memory’s cause faster cycles.
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Old 08-24-2019, 05:45 PM   #5 (permalink)
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I guess we didn't learn our lesson the first time.
Many, many, many years ago, when I was young and stupid, I had a HELOC...….once!!!

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Old 08-24-2019, 06:32 PM   #6 (permalink)
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Ad on the radio said take home 350 a week approves a 30k auto loan.

Always works in cycles. Short memory’s cause faster cycles.
I was just laughing about this yesterday. Listening to talk radio during rush Limbaugh. Commercial was a loan company saying you could use your home refi on trips, autos, whatever. Hmmm. I am 100% ready for the next mortgage meltdown.
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Old 08-24-2019, 06:37 PM   #7 (permalink)
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How do helocs work? Just a fancy credit card that uses your house as collateral? Are they low intrest? Does it matter if you own your house outright?
Kinda. Low interest to start, then fluctuates with the market. Funny though, rates seem to rise but not fall. You can only borrow if you have equity.

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Many, many, many years ago, when I was young and stupid, I had a HELOC...….once!!!

Ya, me too. 3 years ago Took out a 30k HELOC to build my shop a month after we bought the house. We've paid off all our debt this year, HELOC is the last one. We will be done in October, debt free accept for our mortgage. It's been a rough year, no fun, but 62k paid off.
No debt EVER again for us.

Don't get suckered into getting a HELOC.
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Old 08-24-2019, 06:46 PM   #8 (permalink)
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Don't get suckered into getting a HELOC.
i've been thinking about it

other option would be to just wait until i sell this house, but kind of seems like 6 vs 1/2 doz at this point.

unless somebody else has a way to come up with a similar chunk of cash, looking to use it to buy some property
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Old 08-24-2019, 06:46 PM   #9 (permalink)
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Kinda. Low interest to start, then fluctuates with the market. Funny though, rates seem to rise but not fall. You can only borrow if you have equity.


Ya, me too. 3 years ago Took out a 30k HELOC to build my shop a month after we bought the house. We've paid off all our debt this year, HELOC is the last one. We will be done in October, debt free accept for our mortgage. It's been a rough year, no fun, but 62k paid off.
No debt EVER again for us.

Don't get suckered into getting a HELOC.
You're like the .000000000001% of the population that does it right.



Good for you guys!
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Old 08-24-2019, 06:48 PM   #10 (permalink)
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You're like the .000000000001% of the population that does it right.



Good for you guys!
Thank ya sir. It's not been easy by any stretch of the imagination, but so worth it.
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Old 08-24-2019, 06:54 PM   #11 (permalink)
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Ad on the radio said take home 350 a week approves a 30k auto loan.

Always works in cycles. Short memory’s cause faster cycles.
Will 30k even get a base model Civic nowadays?
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Old 08-24-2019, 07:05 PM   #12 (permalink)
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How do helocs work? Just a fancy credit card that uses your house as collateral? Are they low intrest? Does it matter if you own your house outright?
not sure about down there but in Canada you can get a HELOC for 80% of the equity in your house. I just renewed my mortgage and had a HELOC set up for the balance of my equity.

so say your house is worth $500,000, and you owe $250,000. you can get a line of credit with your house as collateral for $200,000 (80% of the 250k)

typically interest is prime plus a bit depending on your bank and financial shit, you don't have to own it out right and its quicker access cash.

I can pull from my HELOC right from my phone instantly where some of my other money can take 5 days to get into my account. this way I can get the money right away and just put it back after I transfer money around.
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Old 08-25-2019, 06:08 AM   #13 (permalink)
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Just closed on a HELOC this week. Bought the place for $70k in January and they valued it at $110k for purposes of the HELOC two weeks ago. I can definitely see how a mortgage crash could happen, haha. The plan is to pay it all back within a couple of years. I only have to pay 1% of the balance per month for the first 10 years, then have 20 years to pay it off. Again, plan to pay it off well before the end of the 10 years. It beats having to live on credit cards.
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Old 08-25-2019, 06:48 AM   #14 (permalink)
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Will 30k even get a base model Civic nowadays?
Under 25k. Or lease for 150/ month. My neighbor just bought one.
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Old 08-25-2019, 06:56 AM   #15 (permalink)
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Just closed on a HELOC this week. Bought the place for $70k in January and they valued it at $110k for purposes of the HELOC two weeks ago. I can definitely see how a mortgage crash could happen, haha. The plan is to pay it all back within a couple of years. I only have to pay 1% of the balance per month for the first 10 years, then have 20 years to pay it off. Again, plan to pay it off well before the end of the 10 years. It beats having to live on credit cards.
What do you mean beats living on credit cards? Living on a heloc is still relying on credit. Except now you’re securing your lifestyle with your house.
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Old 08-25-2019, 07:20 AM   #16 (permalink)
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I guess we didn't learn our lesson the first time. Sadly I think we are going to crash again. I hope not though.
We always will because out entire economy is based on unsound Keynesian economic theory and is designed to go in cycles of recessions and booms.
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Old 08-25-2019, 07:25 AM   #17 (permalink)
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How do helocs work? Just a fancy credit card that uses your house as collateral? Are they low intrest? Does it matter if you own your house outright?
when we bought our house they literally gave us a check book that just drew on a 10K credit line attached to the house.

never used it.

probably going to investigate it now, because roof and garage doors need done.
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Old 08-25-2019, 08:14 AM   #18 (permalink)
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Like any financial tool they have their place. Financing a 70k brodozer isn’t one of them.

I’ve had one for long time but never used it. I got one because it was cheap way to keep to keep a big chunk of cash handy. I’m considering building my retirement house soon and might use instead of a construction loan.
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Old 08-25-2019, 08:28 AM   #19 (permalink)
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I am 100% ready for the next mortgage meltdown.
Me too, got this place paid off and building money back up for when all those repos auction off for a fraction of what they are worth.
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Old 08-25-2019, 08:30 AM   #20 (permalink)
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My parents are selling their house and used their HELOC to install a couple mini splits, new windows and a bunch of other things they should have done in the 44 years they've lived in that house. It doesn't hurt that they have 300k+ equity and have taken out about 5% of that to get things done.


The people supporting their lifestyle off of what little equity they have are the issue.
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Old 08-25-2019, 09:20 AM   #21 (permalink)
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What do you mean beats living on credit cards? Living on a heloc is still relying on credit. Except now you’re securing your lifestyle with your house.
I have a cashflow issue due to a situation with a woman and it was either float the next year or so on cards or on a HELOC. Again not a long term solution.
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Old 08-25-2019, 09:29 AM   #22 (permalink)
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What's wrong with a HELOC? It's a useful tool for many people. You're trading a better interest rate (as it is a secured loan) for the downside that you might lose your house, but that's a fairly reasonable trade off in many cases.

It's not like defaulting on a regular line of credit or personal loan isn't going to result in them coming after the equity in your home, but as the HELOC saves the bank a bunch of BS (read that as time with their funds tied up and not earning interest) in the event that happens, you should get a better rate with the HELOC.


Edit, if you're using it to buy a Margaritaville and some new weaves, then you're fucking stupid and deserve to lose your house.
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Old 08-25-2019, 09:38 AM   #23 (permalink)
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It’s hard to build wealth if you treat your home like an atm.
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Old 08-25-2019, 09:38 AM   #24 (permalink)
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HELOC is not always bad... We have been using them for investment purposes for 15 years, but I never leverage my personal home..

We are building a personal home that will be 750k including land cost. We will be putting 350k down and doing a HELOC for 4-450k as a first position(i.e. in place of a mortgage). By the time we do the HELOC we should have an additional 100k saved up which we will apply to the HELOC making the balance 300k. We will continue to deposit pay checks to the HELOC with a "sweep" from the HELOC to checking as needed.

This will minimize our exposure to daily interest and still give us access to our "cash" when needed. The interest is deductible "if" the HELOC is used to "Buy, Build or significantly improve the property(IRS)", otherwise no deduction for interest on HELOC. The rate will be higher, but interest exposure will offset it. I anticipate payoff in 7 years or less.

This is not without risks because HELOCs are easier for the bank to "call" and we will probably have to renew every 2 years... Shouldn't ever be an issue based on LTV. Must be a 80% LTV or less to do this.
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Old 08-25-2019, 11:00 AM   #25 (permalink)
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We always will because out entire economy is based on unsound Keynesian economic theory and is designed to go in cycles of recessions and booms.


of course it goes in cycles, chaos is the only natural state of things
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