Do you own your home and have some equity in it? If so, you might want to open a home equity line of credit with a lender just in case. This is a line of credit, not a loan, so it should cost you absolutely nothing to open (if your bank does, go elsewhere) and can give you a bit of peace of mind when it comes to the future. If your bank tries to sell you a loan, walk away because that’s not what you want.
Why? Banks have a habit of giving you money when you don’t need it because people who need money often have a great probability of having trouble paying it back. Right now, you probably don’t need the HELOC so the bank will most likely extend you the line against your home equity. It makes sense to apply now, rather than after something bad has happened and you’re under the dual stress of the bad event and figuring out how to come up with the month.
Why now? Also, HELOCs aren’t opened in a day and they take some time to be approved so doing it now, when you’re not under the gun, will be much better for your heart.
The HELOC should not replace your emergency fund as a means of handling short term, high dollar emergencies like a car breakdown.
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