2nd mortgage or heloc

“Just when I thought you couldn’t get any dumber, you go and do something like this and totally redeem yourself”-James Carrey

This is why I don't pay extra.on.my low interest rate mortgage. I invest the excess instead. I'm in no rush to tie my capital up in home equity that's expensive to access.

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If a house is almost paid for, should you leverage the cash equity to buy stocks?

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In this market



This works when you can get a really low interest rate, whatever you get now is going to be north of 6%.

My 2 cents…

Keep your home and investment portfolio separate. This includes real estate assets (land, rental properties, etc) separate from your home.

Trade off decisions between them (paying off mortgage fast or slow) to disable / enable funds availability for investing - peace of mind of owning vs growing portfolio value with higher return than interest rate, etc…fine. No HELOC of borrowing against equity for portfolio risk.

Your home is safe place where you live, raise a family, enjoy grandkids, make family memories, etc. The meaning and importance of a home to one’s life and family is just different / should be treated differently.

When it comes to a home, I think priority is to protect your downside. When I read posts like this, I sense you have never experienced a sustained down-market or black swan event.

While home equity shows up in net worth, don’t let that dupe you into treating your home and investment portfolio as if they are like assets. They are not (IMO).

Thank you for an adult response

The only way this would make sense is if the 2.9% rates ever came back. (they won't unless there were to be a major crash.)

Heck, all my vehicles are paid off except one. Got 2.9% back in the crazy days. That's basically free money. If my MM account ever gets down to 3, I'll pay it off.

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HELOC is a an adjustable rate mortgage with rates higher than normal mortgages. A HELOC is a bad idea.

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Boa is offering a 5.25 for the firat 6mnths

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Rate will bet 9.99% by month 15

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I mean 8 but when the Fed cuts another .75 it will be a 7.25 IO

Its crazy you are in the industry with how awful your takes are

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I am about to do a large home improvement project and have excellent credit and low debt and I was thinking of going HELOC route since I'm not exactly sure how much the project may cost. If I'm understanding this thread it wouldn't be advisable? If not then what option would be better. I was thinking of doing the draw against my money market account which earns 4.00% to lessen the blow after the first 6 month when it goes from 3.99% to variable currently around 7%.

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Whats the size of it?

Is it little enough you could put it on a 0% C.C. that will last 18-24 months and pay it off over that time frame?

If it's $20k or less, probably can go that route, maybe have to open 2 0% cards; but would pay no interest and help with cash flow just paying like $1k a month on it (interest free). Or cash flow some and put a big chunk on the 0% cards.

If it's a very large project I would probably just cash flow it if you're able to with rates still not being fantastic really. Otherwise you're probably looking at north of 6% for anything.

Occasionally I've gotten targeted offers from Chase or AMEX in the recent past for 5.99% on personal loans up to like $25k-$50k I think which is better than HELOC or home equity loan rates would be. All that is really specific targeted offers though.