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
- Flips – If you have enough cash from your HELOC you can buy a property for a fix and flip. …
- 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
- Make smart home improvements. …
- Consolidate high-interest debt. …
- Supplement your emergency fund. …
- Make college more affordable. …
- Care for an elderly parent. …
- Move into a new home on your own schedule.