For example, I and many friends/clients(on my recommendation) opened the biggest HELOCS we could get on our homes about 18 months ago w/o any need or plans to draw on them but simply as a free safety net for the future. If you check the tax records on my house there is a HELOC of about $400,000. What you dont see is my monthly statement with no balance.
I did exactly the same on my previous house, purely for the buffer money. I figured that if things went bad, then I could use actual savings, and then have another pile of credit to dive into before I needed to hit the credit card.
I intend to the do the same when I buy a house soon (don’t worry, not TOO soon!). I’ll put down 20% and then take out a 10% HELOC and not use it… Unless I absolutely HAVE TO of course, by which point I would have lost a job and would not be *able* to get a HELOC at that point in time…
Having said all this, I think we’re in the minority. Most people see a pile of money and spend it. Wait, I said “money”, I meant debt!
