n the last five years, credit great for emergency use.
values of homes throughout
the United States have As good as a HELOC can be as an
increased dramatically. With emergency tool, it should not be
that, the American public has your only emergency tool. It
resorted to an unprecedented would be nice to be able to
amount of borrowing against their withdraw cash from your credit
homes. People have used their line should you lose your job,
home equity to consolidate debt, for instance. But even a HELOC
buy vacation homes, and buy more needs to be repaid, and sooner or
real estate. A few smart people later, you will have to start
have done something even better repaying the loan. Another
with their equity – put it aside concern would be that home values
for emergency use. might decrease, which could
affect your ability to borrow
While a home equity loan has a against your home.
fixed repayment schedule that
isn't too flexible, a home equity A line of credit would make a
line of credit, or HELOC, is good component of a thorough
perfect for emergencies. You can emergency plan, but it should be
apply for one when times are good just one component. A HELOC
and you don't need the money. should not considered a
Then, if you find yourself in replacement for a good, old
need of cash at some time in the fashioned savings account. Nor
future, you can borrow against should it be considered a
your equity on an as-needed replacement for long term
basis. The more flexible investments, such as a mutual
repayment terms and the fact that fund or a 401(K)-retirement plan.
you only need to withdraw funds Instead, a HELOC should be just
when you need them make a line of one piece of a good financial
package. if you do not have a use for the
money now, you can save it for
If things are going well for you that theoretical "rainy day."
and you have a reasonable amount Just don't make it your only
of equity in your property, you umbrella.
should consider applying for a
home equity line of credit. Even
About the Author:
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.homeequityhelp.net, a site devoted to information regarding home equity lending.
