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Old 26 March 2024, 01:53 PM   #1
East Bay Rider
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HELOC or not?

I paid the house off a few years ago. I still have a HELOC (Home Equity Line Of Credit) with zero balance that'll be ending soon. The bank rep called yesterday offering to renew the HELOC before it ends, citing that while the balance remains zero, the money remains available if I need it. If I let the HELOC close, I'd have to reapply from scratch, as expected, if I ever want to borrow money again.
An old coworker once told me that it's somehow safer to keep a lein on the property even if there was no payment due.
Is this true? Is there a reason why you would want to keep a bank or anyone else attached to your property? How do you protect your property?
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Old 26 March 2024, 08:00 PM   #2
Sephiroth
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Hard to say. It’s great to have liquidity available but you don’t want to pay excessively for it (closing costs, etc). If you are employed now and won’t be during the term it’s nice to get it now as you may not qualify if unemployed/retired.
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Old 26 March 2024, 08:22 PM   #3
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I would keep it on. The advantage Bill, I would suspect is that with identity theft that is on a tear, if your home is unencumbered and free of leans, you could become a target for these monsters to attach a loan/mortgage/HELOC to your title without you even knowing about it. If you have a bank attached to it, it becomes that much harder to access as the bank would know about this. My educated guess.
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Old 26 March 2024, 09:23 PM   #4
superdog
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Id keep it. Better to have and not need it, as they say.

If you ever do want it, it’ll be a pain to reapply.
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Old 26 March 2024, 09:37 PM   #5
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The rules must be different here. We’ve been mortgage / debt free for years but still have a line of credit account that shows available funds. We’ve never used it, but it’s nice to know it’s there.

I guess in your case I’d renew it. As mentioned above it might offer peace of mind.
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Old 26 March 2024, 09:46 PM   #6
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I would keep it. Should the need arise it is there and it does not cost you anything right now. If it lapses you will have to apply again and there maybe associated costs and the time it takes to open it again.
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Old 26 March 2024, 10:20 PM   #7
walds11
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Can’t hurt to keep it. What is the renewal process? From what I understand, HELOCs have a draw period then convert to fixed loan if there is a balance. Otherwise the HELOC matures and you’d have to apply for a new one if you want a revolver. Something like that…
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Old 26 March 2024, 10:37 PM   #8
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No I wouldn't keep it because it is a risk for some scammer to use if they got your data somehow.

You can protect your title by freezing any changes with your local tax office.

Many scammers are opening new liens and/or hijacking titles because the tax offices are not as secure as they should be.
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Old 26 March 2024, 11:26 PM   #9
JasoninDenver
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I let ours close years ago.
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Old Yesterday, 02:01 AM   #10
East Bay Rider
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Quote:
Originally Posted by 1st amg View Post
I would keep it on. The advantage Bill, I would suspect is that with identity theft that is on a tear, if your home is unencumbered and free of leans, you could become a target for these monsters to attach a loan/mortgage/HELOC to your title without you even knowing about it. If you have a bank attached to it, it becomes that much harder to access as the bank would know about this. My educated guess.
I think that's what my former coworker was alluding to.
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I bought a cheap watch from the crazy man
Floating down canal
It doesn't use numbers or moving hands
It always just says "now"
Now you may be thinking that I was had
But this watch is never wrong
And if I have trouble the warranty said
Breathe In, Breathe Out, Move On
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Old Yesterday, 02:27 AM   #11
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There is value in having easy access to liquidity. I'd renew.
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Old Yesterday, 03:39 AM   #12
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I’d keep it going. More positives to it than not I think.
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Old Yesterday, 01:14 PM   #13
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We had one for a while, for “just in case,” especially when our kids were little, as we were able to get it from the bank with very little effort. We never used it, but I think it’s worth having if the transaction costs are low.
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Old Today, 10:37 AM   #14
East Bay Rider
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Quote:
Originally Posted by walds11 View Post
Can’t hurt to keep it. What is the renewal process? From what I understand, HELOCs have a draw period then convert to fixed loan if there is a balance. Otherwise the HELOC matures and you’d have to apply for a new one if you want a revolver. Something like that…
The renewal process is just to submit a copy of our latest tax returns and proof of incomes. The bank rep tells me that if I renew before it expires the rate will drop from prime +0.75% (current) to prime +0.25%. They would require another home inspection.
He made it sound that simple. The term would be for 10 years.
__________________
I bought a cheap watch from the crazy man
Floating down canal
It doesn't use numbers or moving hands
It always just says "now"
Now you may be thinking that I was had
But this watch is never wrong
And if I have trouble the warranty said
Breathe In, Breathe Out, Move On
J. Buffett
Instagram: eastbayrider46
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Old Today, 11:13 AM   #15
East Bay Rider
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Quote:
Originally Posted by Sephiroth View Post
Hard to say. It’s great to have liquidity available but you don’t want to pay excessively for it (closing costs, etc). If you are employed now and won’t be during the term it’s nice to get it now as you may not qualify if unemployed/retired.
This is a good point. I'm 57 and have become disabled/forced into an early retirement. My bride will retire in about 5 years. The bank rep told me that renewal costs would be covered by the bank.
__________________
I bought a cheap watch from the crazy man
Floating down canal
It doesn't use numbers or moving hands
It always just says "now"
Now you may be thinking that I was had
But this watch is never wrong
And if I have trouble the warranty said
Breathe In, Breathe Out, Move On
J. Buffett
Instagram: eastbayrider46
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Old Today, 11:40 AM   #16
East Bay Rider
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The main reason for this post was less about the HELOC itself and more about protecting the deed. Basically I feel like I really worked hard to reach this and I'm paranoid that something could come along and steal it out from under me. This is the only property I've ever owned so I don't know what I don't know. I was wondering if the HELOC/lien offered any protection.
I was also thinking about talking to a real estate lawyer about setting up some kind of a trust between myself, my bride and my adult son so the house would be owned by us all equally. My thought is that if I fall ill and need medical care no one can come along, take the house and displace my wife. I don't know if that's a thing but I thought by bringing it up here maybe someone with more experience could share some smart ideas to bring up to the lawyer.
I also brought up the notion to my (unmarried) son that if he wants to, I would sell this house and give him 1/2 towards a house for himself with an inlaw space for me and his mother. We three would own it (trust?) and he could marry/raise family there but if his situation changed, we couldn't be displaced. With all the love and best intentions, I'm not buying any future ex-wife a house. I just want to assure that my lifetime work and greatest asset (house) cannot be taken away. The wild thing is that its a really humble house by most standards, but it's my house now, not the bank's, so I'm kind of protective.
But again, I don't know what I don't know or what to ask the lawyer, should I go that route.
__________________
I bought a cheap watch from the crazy man
Floating down canal
It doesn't use numbers or moving hands
It always just says "now"
Now you may be thinking that I was had
But this watch is never wrong
And if I have trouble the warranty said
Breathe In, Breathe Out, Move On
J. Buffett
Instagram: eastbayrider46
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Old Today, 12:29 PM   #17
ltmgeller
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Depends on the terms and the rate
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