 Quote:
Originally Posted by Urchina
This was a really germane post for us -- we're about to refinance our mortgage and then take out a HELOC to pay off a private debt. In the process of refinancing, we are using our emergency fund to pay down the mortgage even more (this frees up a lot of cash and will allow us to keep this place as a rental when we move). But it means we'll be operating without an EF for a few months, and we're planning on using the HELOC as an emergency fund during that time. So it's nice to see some thoughts on the HELOC.
As far as the credit issue, we're not having any trouble with getting loans or a HElOC. I'm sure having great credit scores and a good loan to value ratio is helping.
But, we'll make sure to not take the HELOC for granted and will keep an EF in cash ready.
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Operating without an emergency fund is like playing Russian Roulette.
Don't assume the HELOC will always be there to draw from.In this enviornment,it's here today and it may be gone tomorrow.
Here's a story about a man who paid off his HELOC with all of his savings,only to have it frozen days later by Bank Of America.
Lenders block home-equity line withdrawals North County Times - North San Diego and Southwest Riverside County News - NCTimes.com - Californian.com
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