Determining home equity loan value

[Sigarms]

He's not dong a home equity loan, he's doing a home equity line of credit. They aren't the same thing.

At the end of the day, not certain if there is a perfect answer to any loan type question given all the variables.

What I will say is given the fact that we own nothing on the home we've lived at for some time, the home equity line of credit has worked out pretty well. Yes, we have interest, but no closing costs.

 

[MossRoad]

The irony is I never looked at our first home as an investment, but a place I wanted to live, and a place for kids to have their own land to wonder about on.

Now that we are going to sell, I see it more as an investment property because I thought we paid way more for the place than we did, because I thought $3,300 an acre was way to steep.

As mentioned, first home I ever bought at age 38 or so.

Yep. Our 20 acres out in the county is now worth more than our 1 acre with a house on it near the city.

We bought our first house 4 months before our wedding. I was 24. Had it paid off at 28. Bought 20 acres at age 28 and paid it off by age 32. Bought our next house at age 32. Would have paid it off by age 37 but my father passed away and left us a gift, so we paid it off early at age 35 and bought a used van. That was supposed to be our 5 year house.... we've been there about 30 years.

I never thought I'd be in a house long enough to have to put a 2nd new roof on, but it's now getting close.

 

[MossRoad]

At the end of the day, not certain if there is a perfect answer to any loan type question given all the variables.

What I will say is given the fact that we own nothing on the home we've lived at for some time, the home equity line of credit has worked out pretty well. Yes, we have interest, but no closing costs.

Yep. For many years we kept a home equity loan open... probably 20+. I think we had three of them at 7 years each. We viewed it as a credit card backed by the equity in our house. Anytime we put something on that card, we paid it off ASAP. That allowed us not to have to drain our savings for many purchases. The interest was low compared to a credit card. And when the balance was zero, there were no payments. It also had the benefit of being considered a mortgage, so despite having a zero balance most years, it qualified us for a mortgage exemption on our property taxes.

A few months ago, our credit rating dropped a few points. Couldn't figure out why.... the HELOC expired! We hadn't used it in so long we kinda forgot about it. Looked into getting it again, but the costs of a home appraisal (required) were about equal to the property tax savings now, and interest rates, should we use it, are high compared to when we had it, and we are fortunate enough to have enough cash in savings to purchase anything we want, so we no longer have concerns about draining our savings.... so we decided to just not do it again.

 

[Sigarms]

We bought our first house 4 months before our wedding. I was 24. Had it paid off at 28. Bought 20 acres at age 28 and paid it off by age 32. Bought our next house at age 32. Would have paid it off by age 37 but my father passed away and left us a gift, so we paid it off early at age 35 and bought a used van. That was supposed to be our 5 year house.... we've been there about 30 years.

I'm still trying to figure out if I'm regretting scuba diving, snowboarding, white water kayaking, hiking and camping for a good 13 years when I was single after I gave up drinking as a "hobby".

When I read you response, I kind of do regret it (not settling down earlier), but sometimes I really don't if that makes sense

End of the day, with our house and property that we need to sell after we move, I really don't think it will kill us financially after we sell.

As mentioned, even if we can't sell, we can still swing the payments for as long as it takes, but I'm praying it doesn't get to that point.

 

[MossRoad]

I'm still trying to figure out if I'm regretting scuba diving, snowboarding, white water kayaking, hiking and camping for a good 13 years when I was single after I gave up drinking as a "hobby".

When I read you response, I kind of do regret it (not settling down earlier), but sometimes I really don't if that makes sense

End of the day, with our house and property that we need to sell after we move, I really don't think it will kill us financially after we sell.

As mentioned, even if we can't sell, we can still swing the payments for as long as it takes, but I'm praying it doesn't get to that point.

NO REGRETS!!!!

I've mentioned before that my wife and I met in high school, dated for 6 years before we got married, and then didn't have kids for 7 more.... And I gave up drinking at age 24. So we also had 13 years of pretty much doing whatever we wanted whenever we wanted. We did a LOT of camping and hiking, road trips, national parks, etc...

Had someone not told me about 401K and the miracle of compound interest when I was around 28 years old, we'd have been in an entirely different situation than we are now.

And if I ever DID have any financial regrets, it would be that I didn't start investing in my early 20s. I missed 7 years of that. But since I didn't know, I DON'T regret it. You can't go back. But if I could go back, I'd go and visit a few folks' parents and give them some pamphlets on birth control, but that's for another discussion.

 

[Sigarms]

NO REGRETS!!!!

I've mentioned before that my wife and I met in high school, dated for 6 years before we got married, and then didn't have kids for 7 more.... And I gave up drinking at age 24. So we also had 13 years of pretty much doing whatever we wanted whenever we wanted. We did a LOT of camping and hiking, road trips, national parks, etc...

Had someone not told me about 401K and the miracle of compound interest when I was around 28 years old, we'd have been in an entirely different situation than we are now.

And if I ever DID have any financial regrets, it would be that I didn't start investing in my early 20s. I missed 7 years of that. But since I didn't know, I DON'T regret it. You can't go back. But if I could go back, I'd go and visit a few folks' parents and give them some pamphlets on birth control, but that's for another discussion.

Yeah, but... to this day my wife HATES the fact that before we got married, I told her "well, I've done everything I've ever really wanted to do with traveling and doing things on my own, so I guess it's time to I could get married"

That said, from the first day I met her to the day of our wedding was no more than 6 months. Went out to eat the other night and we drove by where she picked up her wedding dress. She always jokes that the girl at the dress shop fell over dead when she told her the wedding was THAT year in the fall LOL

When I gave up drinking, my wife was still in Vermont married to a skumbag. I'm not complaining on the way things played out on my end (we didn't meet until years later until we both moved to NC)

 

[MossRoad]

Yeah, but... to this day my wife HATES the fact that before we got married, I told her "well, I've done everything I've ever really wanted to do with traveling and doing things on my own, so I guess it's time to I could get married"

That said, from the first day I met her to the day of our wedding was no more than 6 months. Went out to eat the other night and we drove by where she picked up her wedding dress. She always jokes that the girl at the dress shop fell over dead when she told her the wedding was THAT year in the fall LOL

When I gave up drinking, my wife was still in Vermont married to a skumbag. I'm not complaining on the way things played out on my end (we didn't meet until years later until we both moved to NC)

That first paragraph made me spit!

Good for you two!

 

[MossRoad]

We just celebrated our 40th wedding anniversary a couple weeks ago. Plus the 6 year dating.... so...


Two score and 6 years ago, on August 29, 1979, we had our first date.

My apologies to honest Abe.

 

[Torvy]

He's not dong a home equity loan, he's doing a home equity line of credit. They aren't the same thing.

Home Equity Loan vs HELOC: Pros and Cons - NerdWallet

Home equity loans and lines of credit let you borrow your home's equity. The loan is a lump sum and the HELOC is used as needed.

www.nerdwallet.com

I understand precisely how they work. 20+ years in financial services.

HELOC has the same negatives as a Home Equity Loan.

One place I worked had their HELOC tied to a checkbook. People were writing checks on equity to pay for everyday transactions.

 

[Sigarms]

One place I worked had their HELOC tied to a checkbook. People were writing checks on equity to pay for everyday transactions.

I guess we could do that (we basically have a checkbook), however, it's only going towards the new home and renovations. That's what's in our budget

Besides that, to my dismay, wife said I can't use that checkbook for a 911! Go figure...