In looking at buying a property, we applied for a HELOC (home equity line of credit) to make cash flow issues easier. We decided not to buy the second property, but in talking with my banker, we decided to go ahead and set up the HELOC. There are no closing costs, and there are no interest charges as long as we don't draw any money from it. It will remain available for 10 years. If we need money 5 years from now, we don't have to prove my income, we can just ask for a check.
I figure we can now use this HELOC as an emergency fund. We always keep more cash than I would like, as it makes my wife feel more comfortable. I'm hoping that having this money available will make her feel better about keeping less in cash.
Does anyone see a downside to using a HELOC in this manner?
I figure we can now use this HELOC as an emergency fund. We always keep more cash than I would like, as it makes my wife feel more comfortable. I'm hoping that having this money available will make her feel better about keeping less in cash.
Does anyone see a downside to using a HELOC in this manner?
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