19 June 2022 6:41

Using HELOC for vehicle purchase: can this be done wisely?

What are the disadvantages of a home equity line of credit?

Cons

  • Variable interest rates could increase in the future.
  • There may be minimum withdrawal requirements.
  • There is a set draw period.
  • Possible fees and closing costs.
  • You risk losing your house if you default.
  • The application process for a HELOC is longer and more complicated than that of a personal loan or credit card.


How do you make money from a HELOC?

3 Ways to Make Money with a Home Equity Line of Credit

  1. Flips – If you have enough cash from your HELOC you can buy a property for a fix and flip. …
  2. Rentals – If you have enough cash you can buy rental property outright.

How do you use a HELOC wisely?

Top 6 ways to use a home equity line wisely

  1. Make smart home improvements. …
  2. Consolidate high-interest debt. …
  3. Supplement your emergency fund. …
  4. Make college more affordable. …
  5. Care for an elderly parent. …
  6. Move into a new home on your own schedule.