HELOC Frostbite — OUCH

[meadandale]

“You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.”

You’d think a pig would be smarter, no?

I remember ridiculing someone I read about who did this very same thing. This type of behavior is the very essence of the people in the move Maxed Out. People are so addicted to credit that they freak out when that potential money (in reality, debt) is taken away.

So, you pull out $100k in HELOC and pay $3k per year for the privilege of having it sit there (actually you pay more because of inflation eating away at the value of the $100k).

Maybe if you put that $3k into the bank and earned interest on it? At least then you’d only be losing the difference between the inflation and your deposit interest rate rather than 3% PLUS inflation.

*shakes head*

[aldante]

Is this one of those strategies where you make it up on volume?

OMG…………..LOL………..

BTW the going rate for heloc is 4% with good credit…..you still may want to take the advice on here and look at your math….

aldante,

stick a fork in me

[aldante]

Is this one of those strategies where you make it up on volume?

OMG…………..LOL………..

BTW the going rate for heloc is 4% with good credit…..you still may want to take the advice on here and look at your math….

aldante,

stick a fork in me

[aldante]

Is this one of those strategies where you make it up on volume?

OMG…………..LOL………..

BTW the going rate for heloc is 4% with good credit…..you still may want to take the advice on here and look at your math….

aldante,

stick a fork in me

[aldante]

Is this one of those strategies where you make it up on volume?

OMG…………..LOL………..

BTW the going rate for heloc is 4% with good credit…..you still may want to take the advice on here and look at your math….

aldante,

stick a fork in me

[aldante]

Is this one of those strategies where you make it up on volume?

OMG…………..LOL………..

BTW the going rate for heloc is 4% with good credit…..you still may want to take the advice on here and look at your math….

aldante,

stick a fork in me

[NotCranky]

You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.

Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.

[NotCranky]

You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.

Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.

[NotCranky]

You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.

Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.

[NotCranky]

You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.

Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.

[NotCranky]

You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.

Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.

[(former)FormerSanDiegan]

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.

This is a good point. It’s not like someone would borrow money at 6% and stash it in savings at 3% indefinitely. They should obviously have an exit strategy or a planned use of those funds in the future that will pay off.

[(former)FormerSanDiegan]

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.

This is a good point. It’s not like someone would borrow money at 6% and stash it in savings at 3% indefinitely. They should obviously have an exit strategy or a planned use of those funds in the future that will pay off.

[(former)FormerSanDiegan]

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.

This is a good point. It’s not like someone would borrow money at 6% and stash it in savings at 3% indefinitely. They should obviously have an exit strategy or a planned use of those funds in the future that will pay off.

[(former)FormerSanDiegan]

It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.

This is a good point. It’s not like someone would borrow money at 6% and stash it in savings at 3% indefinitely. They should obviously have an exit strategy or a planned use of those funds in the future that will pay off.

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