I took out an HELOC back in February 2005. My initial draw was $75K, and then around May/June I pulled out another $25K. I got Prime +.25%, so for awhile it looked pretty lucrative. My first payment was only 5.5%. However, my last one was 7.75% and the next one should go up to 8%.
However, I've been pretty lucky. That money, plus the money I got from selling my condo back in December of '04 has been spread out into mutual funds, stocks with a Scottrade account, an MMA with Emigrant Direct, and a few other things. I didn't track where that money specifically from the HELOC went, because it was pooled with the condo sale money.
But over the past year, just the ~$46K that went into my Scottrade account has made about $10K. And I haven't paid that yet in interest on the whole $100K HELOC! I paid $4827 in interest in 2005, and so far this year, maybe $3000. So I'm doing okay so far.
However, now that the interest rates are going up, I'm paying the HELOC down faster. I used to just take the interest payment and round up to the next $100. Lately though I've been paying $1000 each month, and might just move a big chunk of money from my Emigrant account to knock it down quicker. It doesn't make much sense to have a chunk of money laying around earning 4.5%, when I could use it to pay down an 8% loan.
I guess in alot of ways it sounds like I'm robbing Peter to pay Paul, while I'm having fun with Mary. But it seems to have worked, so far.
