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home equity line of credit increase

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rb5505
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home equity line of credit increase  Reply with quote  

are there any disadvantages to raising our unused home equity line of credit from 25k to 109k? since they goofed by not adding both our names to the paperwork a couple years ago, our credit union is offering the increase at no charge because it's the maximum available to us. we got it just for emergencies and currently don't have plans for anything above the 25k. i'd heard it's smart to secure all you can since you never know if sometime later we might not be able to get it. the rate is a variable 3.5%. are there any reasons to not increase it? will it effect our excellent fico scores?

see the credit union's email below....
"I was wondering if you would like to keep your Home Equity Line of Credit at a $25,000 limit, or if you would like to increase it. Based on your home’s tax-assessed value, we could establish a credit line up to $109,000. If you were contemplating remodeling your home, or paying off some unwanted debt perhaps a higher limit would benefit you".

thanks.
Post Wed Mar 16, 2011 8:41 pm
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coaster
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It will help your credit score and it will hurt your ability to borrow.

Go figure. Credit scoring is a paradox.

Details on the www.myfico.com site.
Post Thu Mar 17, 2011 6:49 am
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littleroc02us
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I'm sorry are you considering raising your Home equity to use as an EF account? How does that make any sense? So, if you lose your job or have a car break down your solution is to go further into debt. Not a good idea!

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Mar 21, 2011 6:10 pm
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rb5505
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quote:
Originally posted by littleroc02us
I'm sorry are you considering raising your Home equity to use as an EF account? How does that make any sense? So, if you lose your job or have a car break down your solution is to go further into debt. Not a good idea!


we intend only to use it for important home improvements or home repairs and nothing else. i was just wondering if having the additional available would be good? or is this a case where we should say, thanks but no thanks?
Post Tue Mar 22, 2011 1:49 am
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littleroc02us
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Your never going to get me to say it's o.k. to borrow to improve a house. I don't borrow money unless it's for a mortgage. My wife and I have remodeled our entire house with cash. We saved and renovated a room and then we saved again and did another until they were all complete. Now we have a beautiful house with no debt.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Tue Mar 22, 2011 4:25 pm
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rb5505
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thanks for the feedback.

since the cr union didn't put both our names on the original 2 yr old paperwork, they are re-doing the heloc at no charge ($120 saved). they're also starting the 10 yr lock period over and giving us the same variable rates (min 3% & 9.9% max) that we got 2 yrs ago. 3% is the current rate, if we had a balance. the current variable range is 3.99--14.99%. we changed the line from 25k to 50k.
Post Tue Mar 22, 2011 9:10 pm
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littleroc02us
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Good luck with that?????

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Wed Mar 23, 2011 2:23 pm
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smithhooper
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A Home Equity loan is a lump sum of money borrowed up front.You make scheduled payments, but you do not get to reuse that equity. Its just a loan.They're just following the lead of US credit card companies who are arbitrarily jacking up interest rates on existing balances.
Post Wed Apr 06, 2011 6:02 am
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tomibraniste
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nice, you can try good luck !
Post Thu Apr 07, 2011 3:51 pm
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savana
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quote:
Originally posted by smithhooper
A Home Equity loan is a lump sum of money borrowed up front.You make scheduled payments, but you do not get to reuse that equity. Its just a loan.They're just following the lead of US credit card companies who are arbitrarily jacking up interest rates on existing balances.


It is much better to understand what will be the things that are necessary and is needed to look for the higher interest rates.
Post Mon Apr 11, 2011 10:43 am
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reversemortgageinfo
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a home equity loan is similar to a reverse mortgage  Reply with quote  

Instead of a home equity loan, homeowners 62 and older may want to consider a reverse mortgage. It uses the equity you've built up in your home and turns it into cash, similar to a home equity loan.

However, you can usually get more money with a reverse mortgage and you don't have to pay it back until you leave the home.
Post Fri Apr 22, 2011 10:15 pm
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savana
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I have to get all the details related to reverse mortgage and what I have to do applying for it. Actually it is necessary to understand all the benefits and then accordingly, applying for it further.
Post Tue Apr 26, 2011 12:20 pm
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rosehusten
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Great  Reply with quote  

Great information provided I will let you know about it!
Post Fri Jul 29, 2011 9:33 am
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kate032
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quote:
Originally posted by littleroc02us
Your never going to get me to say it's o.k. to borrow to improve a house.


In general, I agree, and specifically for the op, based on what information he provided. However, for repairs that are more essential than aethestic, it isn't always a terrible idea to get a second mortgage. For instance, it would be wise to replace a front door that has inadequate insulation and is a thief's dream door.
Post Fri Jul 29, 2011 3:07 pm
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littleroc02us
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quote:
Originally posted by kate032
quote:
Originally posted by littleroc02us
Your never going to get me to say it's o.k. to borrow to improve a house.


In general, I agree, and specifically for the op, based on what information he provided. However, for repairs that are more essential than aethestic, it isn't always a terrible idea to get a second mortgage. For instance, it would be wise to replace a front door that has inadequate insulation and is a thief's dream door.


I still don't agree with that because what you do is if it's an emergency like the water heater blows up or you need to replace a door due to a break in, then you use your emergency fund that is for emergencies, if it isn't an emergency then you save up the money and pay in cash. This is how my wife have operated in our household and what's great about it is that we have no debt and no debt is no worries.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Jul 29, 2011 3:15 pm
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