# HELOC experience



## uts (Jul 8, 2019)

Looking for guidance on HELOC. I have read a bit about them. Don't have a specific need this minute but I have seen so many videos on YouTube how people use it creatively. We will be doing a few projects around the house and using someone else's money rather than your own seems like a good idea (we do have money saved up so paying back is not an issue).

Also in these articles/videos I see people mentioning 0% intro HELOC which really peaked my interest, but from what I see no bank (big or small) around me has that kind of promotion. So looking for recommendations and guidance.


----------



## jeffjunstrom (Aug 12, 2019)

We used an adjustable rate HELOC to build a deck and some other projects. We promptly paid it down quickly, but having the peace of mind to rely upon it is attractive. It's not someone else's money, as it is secured by your real estate. I like having it there, even when it has a zero balance, for emergencies or other projects.


----------



## corneliani (Apr 2, 2019)

HELOC's are simply a Line of Credit similar to a credit card, except that a CC is based solely on personal credit history while the HELOC is secured by tangible real property. This theoretically should net you a better rate (with the HELOC) as the risk profile is lower, but the cost of money isn't always that simple. For small projects CCs may be cheaper as they don't carry the overhead of setting up a new home loan (appraisals, underwriting, processing, etc). And you can find introductory rates on CCs just as you can on HELOCs, plus the potential to earn points and enter that crazy ecosystem of gaming the system for the most points! 

That being said I've loved using my HELOC as quick access to capital, esp in the real estate world where cash is king. I've built my existing house using an intro 1.9% (Interest-only) HELOC as a bridge loan, without the overhead of a construction loan! No need for draw requests, appraisals, etc etc etc. And no need to liquidate performing investments to generate liquidity. Win win win!

If you have the equity in your home it's a must-have tool in your toolbox, IMO. But only if you use it to save/generate more money than its costing you.


----------



## DoubleBarrel (May 19, 2019)

A quick google search didn't return any 0% intro rate HELOCs. I would shop a local credit union first. Outside of the 0% intro rate, a few other perks may be a reduced rate in year one, reduced rate on initial advance, loan fees (appraisal,title,etc) paid by the lender as long as the credit line is open for x amount of years, reduced fees for certain members/customers, and reduced fees for other loan criteria (credit score, LTV). Your buying money as a product, so shop around for the best deal and then let the most attractive offer pull credit and qualify you for the loan.


----------



## uts (Jul 8, 2019)

Thank you everyone for explaining, advise and experiences. I do understand that it is pretty much our many since its backed by the house but it doesn't come out of my bank account so that's a comfortable feeling.

I am well into the credit card points so I completely understand and therefore pay most things on them but when people need checks like labor for a remodel I rather not liquidate any assets or drain my bank account as long as it's a good rate and I need the money. I understand it's all relative.

Most of my small banks dont publish rates online so I will have to go in and check.


----------

