5 ms·

Worst case you can get an HELOC approved in about two weeks.

astura 9y ago
Just because you've always had easy access to credit in the past doesn't mean you always will in the future. Depending on easy access to credit for financial security is very foolish. People lose jobs during a recession. People without income don't usually have easy access to credit and lending standards tighten (or even temporarily halt) during a recession. If the housing crash causes you to become underwater or close to it on your mortgage you aren't going to get approved for a home equity line of credit. Any lines of credit you did have will be cancelled.
- tapatio 9y ago
  If you have 50% equity in your house, you'll get a HELOC. It's just an easy way to access equity without selling your house. Of course if you have close to no equity this won't work.
  - astura 9y ago
    Housing crashes strips away your equity, that's kind of the definition of a housing crash. HELOCs were cancelled en mass during the last crash. Lending standards are tightened and new laws are passed during crashes, just because you can get a no income HELOC ("liar loan") now doesn't mean you always will be always able to in the future.
    - tapatio 9y ago
      Get it now and let it sit. Why would you wait until the market crashes?
      - reverend_gonzo 9y ago
        1) A lender can reduce (or freeze) your HELOC. 2) Pulling money out of your house during a downturn is dumb. You now have to pay interest on that, and in a few years or so, you're going to have a lump sum payment to pay off that loan. If you just keep pulling money willy-nilly, you're very likely to lose that house.
        mooreds 9y ago
        Agreed you shouldn't pull 'willy-nilly' but it can be an additional source of 'income' and can help with short term cash flow (which can be crucial if you move from being an employee to a contractor). Like any other tool, be aware of the way it can help or hurt you.
      - astura 9y ago
        Ive already said it twice: existing HELOCs get cancelled when the market crashes. It happened en mass in 2008. The bank says "You know that line of credit we gave you? We're taking it away." They also do this if your credit score drops. That's a big part of what got a lot of people into a lot of trouble in 2008-09. They also usually come with closing costs and fees. I don't have a HELOC because I have a savings account instead. Pulling equity out of your house like it's a checking account as a matter of course is a good way to lose your house. Putting 100% of your money into your primary residence and relying on being able to borrow against it (with interest!) when you need cash is really, really irresponsible and stupid risky. They can have their place, but not as a substitute for a savings account.
mooreds 9y ago
I'd open a HELOC now, but be aware it could be closed in the event of a bank reevaluating your ability to pay. It's one more source of 'income' for diversification.

Just because you've always had easy access to credit in the past doesn't mean you always will in the future. Depending on easy access to credit for financial security is very foolish. People lose jobs during a recession. People without income don't usually have easy access to credit and lending standards tighten (or even temporarily halt) during a recession. If the housing crash causes you to become underwater or close to it on your mortgage you aren't going to get approved for a home equity line of credit. Any lines of credit you did have will be cancelled.

tapatio 9y ago
If you have 50% equity in your house, you'll get a HELOC. It's just an easy way to access equity without selling your house. Of course if you have close to no equity this won't work.
- astura 9y ago
  Housing crashes strips away your equity, that's kind of the definition of a housing crash. HELOCs were cancelled en mass during the last crash. Lending standards are tightened and new laws are passed during crashes, just because you can get a no income HELOC ("liar loan") now doesn't mean you always will be always able to in the future.
  - tapatio 9y ago
    Get it now and let it sit. Why would you wait until the market crashes?
    - reverend_gonzo 9y ago
      1) A lender can reduce (or freeze) your HELOC. 2) Pulling money out of your house during a downturn is dumb. You now have to pay interest on that, and in a few years or so, you're going to have a lump sum payment to pay off that loan. If you just keep pulling money willy-nilly, you're very likely to lose that house.
      - mooreds 9y ago
        Agreed you shouldn't pull 'willy-nilly' but it can be an additional source of 'income' and can help with short term cash flow (which can be crucial if you move from being an employee to a contractor). Like any other tool, be aware of the way it can help or hurt you.
    - astura 9y ago
      Ive already said it twice: existing HELOCs get cancelled when the market crashes. It happened en mass in 2008. The bank says "You know that line of credit we gave you? We're taking it away." They also do this if your credit score drops. That's a big part of what got a lot of people into a lot of trouble in 2008-09. They also usually come with closing costs and fees. I don't have a HELOC because I have a savings account instead. Pulling equity out of your house like it's a checking account as a matter of course is a good way to lose your house. Putting 100% of your money into your primary residence and relying on being able to borrow against it (with interest!) when you need cash is really, really irresponsible and stupid risky. They can have their place, but not as a substitute for a savings account.

mooreds 9y ago

I'd open a HELOC now, but be aware it could be closed in the event of a bank reevaluating your ability to pay. It's one more source of 'income' for diversification.