The concept of a HELOC is freakin' nuts, write a check and it's added to your loan balance, who the h*ll ever thought up this idea and when? I suspect there are thousands of realtors and mortgage brokers currently living off their HELOCS, I personally know a few of them. This will be devastating news to many.
Actually, for some of the financially responsible, I don't think it was a bad idea. Just that it's been well over abused.
Really, let's say someone "needs" to buy car and is financially responsible. Why not borrow on a heloc and get a lower rate than through traditional financing? Makes sense to me. Someone mentioned about the heloc stretching the terms out 30years …. But I thought you could pay the car off early even with a heloc.
The only issue I see is that a lot of people go in over their head with this as an open atm. Well, some people are idiots, that's their problem. Though, I have to admit, I've never purchased a new car other than paying it off in full the moment I left the dealership- so I can't relate.
It's no different than CC. Some people use that as an open atm, and pay 19-20% apr on their balance, while others use CC because it's convenient, and not only pay off the balance in full each month, but get something back from the CC company.
