Paying off your mortgage - HELOC?

[Crazy4Blue]

Does anyone here have experience with a HELOC (Home Equity Line of Credit)? If so, is a good idea or something that's very risky?

[Darrell KSR]

Does anyone here have experience with a HELOC (Home Equity Line of Credit)? If so, is a good idea or something that's very risky?

Similar to home mortgage.

The new tax law doesn't allow deduction of HELOC interest, but your mortgages on your first and second home remain deductible, if that matters.

Any specific questions? It's just a loan secured by your home.

[KSRdallen]

Similar to home mortgage.

The new tax law doesn't allow deduction of HELOC interest, but your mortgages on your first and second home remain deductible, if that matters.

Any specific questions? It's just a loan secured by your home.

I was really disappointed that HELOC's are no longer tax deductible. I understand it, but don't like it. Easy way to have a low interest rate, tax deductible loan.

[KentuckyWildcat]

Had one on my first mortgage. Bad appraisal killed me, long story.

Paid off the house last fall and getting a HELOC now to do some upgrades.

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[KentuckyWildcat]

My 2 cents...

Personally, I hate all loans. And would cash flow our upgrades but the wife is ready now...sometimes you just lose.

With that said, my friend/banker says they are the best way to go. All loans risk level is based on debt to income ratio. Personally, I'm not borrowing anything against my house unless I can pay it off in 1 year.

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[Darrell KSR]

I was really disappointed that HELOC's are no longer tax deductible. I understand it, but don't like it. Easy way to have a low interest rate, tax deductible loan.

Not a huge deal for me, but guess who paid off his mortgage last year and kept a HELOC? Yeah, my timing sucks.

[KSRBEvans]

We used a HELOC when we were getting our home ready to sell in 2009. We accessed it as we were getting work done and paid it off as part of the closing, so for us it was an easy way to get short-term access to ready cash.

[Catfan73]

We just consolidated about $30k in debt into home equity about 4 months ago and cut everything up except for a MC and Amex. Still going to have a much lower rate but it sucks that its no longer deductible.

[KeithKSR]

We just consolidated about $30k in debt into home equity about 4 months ago and cut everything up except for a MC and Amex. Still going to have a much lower rate but it sucks that its no longer deductible.

Even though it isn't deductible you are gonna save big on interest rates.

[Doc]

Does anyone here have experience with a HELOC (Home Equity Line of Credit)? If so, is a good idea or something that's very risky?

I have one. I paid off my home and now use it for big purchases then pay it back. Example...2 kids in school means three times a year I get a tuition Bill despite one having prepay (Does not cover books, etc). Also pay "cash" for a car will get you a better deal. We are getting ready to buy a lot in Colorado tok build a mountain cabin on and will be making a "cash offer" that I'll pull from it, etc. Mine has a 4.5% annual interest rate so its easy money. Heck, i could put it in the stockmarket and come out ahead. So while the interest is no longer deductible, it's not a huge issue to me considering the conve hence of it

[MickintheHam]

I have similar situation, Doc. it is not a bad infra to have it and use it.

[Catfan73]

Even though it isn't deductible you are gonna save big on interest rates.

Yeah it’s pretty sweet. Should have done it about five years ago.

[catmanjack]

Speaking of paying off homes, any secrets there?

[KentuckyWildcat]

Speaking of paying off homes, any secrets there?

Tips on paying off the house early? Our is paid off, did it 7-8 years.

[KeithKSR]

Speaking of paying off homes, any secrets there?

Pay the next month's principle each time you make a regular payment. Early on you would be paying an extra $140 a month on a 30 year loan, but the extra reduces the principal quickly.

You can also pay an extra $100 a month. On a 30 year 4.5% fixed rate loan of $100,000 you are going to pay about $507 a month for 360 months, or about $182,520 total. The extra $100 a month will cut you down to 21.5 years, or about $131,410 total.

[catmanjack]

Thanks