Home equity line of credit

[dog friendly]

I am thinking of getting a home equity line of credit for a few home improvements. I don't want to use money from our retirement funds since everything is doing so poorly at this time. We were told by our investor that this is the way to go...... anyone have any input for me? Thanks

[WSOX47]

Uisng Bank's $$$ helps the Bank but more importantly may allow your nest egg to weather the current storm.

[thegreenerside]

be careful with the home equity line because some banks have or can call them due immediately

[Aceskaters]

Make sure you know if your HELOC is at a fixed interest rate or a variable interest rate. If it's variable, the monthy payment can go up if interest rates go up.

[WSOX47]

They make excellent points. Your HELOC rate , if variable--and most are such--should be at something LESS than Prime. Say bedtween 0.25%-1.01% Less than Prime, adjusting every month. As of yesterday Prime was 5%, so P-1.01 % would be a 3.99% rate. And the interest may be Tax Deuctible (most are, but there are some exceptions about which the Bank can provide examples that they will likely couch in terms that "you should really contact your Tax Advisor") But for virtually everyone taking out a HELOC where there is signifcant longtime equity, it will be Tax Deductible, making the effective Interest even lower than the 3.99% in the above example. (If, for example, your Incremental Fed Tax Rate is 25%, then the effective Interest would be 25% less than 3.99%, or 3.99 X .75 = 2.993%)