HELOC

[holmanjp]

Home Equity Line Of Credit

Does anyone have or know anything about these?

I called my bank and they offer it. I don't think it's what I thought it was. At least not what my bank offers.
I was under the impressing you could deposit money into it, say direct deposit payroll checks or deposit slips,
and also then have a Checkbook, Credit Card or Debit Card attached to it for buying/paying for things.

Is this not how they work, and my bank happens to not offer those options?

The reason I'm looking is hoping to pull the pin at work, (pending this crypto bull run) and want an available High line of credit before I do quit/semi retire just incase. Also have you seen how people use these as debt eliminators? Velocity Banking, is what they call it.

[Purp1eOne]

Apr 8, 2024 16:23:59 GMT -6 holmanjp said:

Home Equity Line Of Credit

Does anyone have or know anything about these?

I called my bank and they offer it. I don't think it's what I thought it was. At least not what my bank offers.
I was under the impressing you could deposit money into it, say direct deposit payroll checks or deposit slips,
and also then have a Checkbook, Credit Card or Debit Card attached to it for buying/paying for things.

Is this not how they work, and my bank happens to not offer those options?

The reason I'm looking is hoping to pull the pin at work, (pending this crypto bull run) and want an available High line of credit before I do quit/semi retire just incase. Also have you seen how people use these as debt eliminators? Velocity Banking, is what they call it.

I am not an expert on the subject and have never had one but I thought it was basically using the equity in your home to get a loan.  Just a lump sum you get as a loan from the bank at whatever rate they are offering.  No checkbook, credit card, etc.  Just a second mortgage used to combine other debts that you are paying a higher rate for.

[holmanjp]

No it's not lump sum, it's revolving. You only need to make interest payment, but in my mind that's the definition of retarded. Just like a CC but backed by your homes equity. So lower interest rate than CC and normally higher limits, Around the same interest rate as refi, or 2nd mortgage. Pending your credit score and income to debt ratio you can get a limit for up to 90% of homes equity. Example, 400k house - owe 225k = 140k revolving credit. Aven offers one with CC attached, it has unlimited 2% cash back. People are using these for all expenses and payments, Each paycheck they get they deposit up to what is owed into the heloc. The rest stays in checking or savings for times when you might have spent more in a month than you made.

If you make 10k a month and had a PLOC/CC or Heloc
WK 1 you pay all bills and all living expenses with Line of credit.
Fridays paycheck you pay it off/might be short pending bills due that week or may not need to transfer whole check to zero out the balance.

Wk 2 pay that weeks bills and all living expenses
Fridays paycheck you pay it off/might be short pending bills due that week or not need whole check.

It's what the wealthy do, use line of credit as cash flow.

So if you made a 2k house payment and tomorrow you need a new fridge. Pay the 2k to the line of credit, and turn around and take 2k back out for a new fridge. If you give that 2k to a loan you cant get it back like you can with revolving credit.

People use these to throw chunks 10k or more at mortgages, cars loans and other monthly payments.
We have all heard the saying you borrow for a house or car you pay for the bankers house or car first then you start paying of yours. It's because the loans are set up as Interest first payments.

[holmanjp]

[Purp1eOne]

Apr 9, 2024 8:45:54 GMT -6 holmanjp said:

No it's not lump sum, it's revolving. You only need to make interest payment, but in my mind that's the definition of retarded. Just like a CC but backed by your homes equity. So lower interest rate than CC and normally higher limits, Around the same interest rate as refi, or 2nd mortgage. Pending your credit score and income to debt ratio you can get a limit for up to 90% of homes equity. Example, 400k house - owe 225k = 140k revolving credit. Aven offers one with CC attached, it has unlimited 2% cash back. People are using these for all expenses and payments, Each paycheck they get they deposit up to what is owed into the heloc. The rest stays in checking or savings for times when you might have spent more in a month than you made.

If you make 10k a month and had a PLOC/CC or Heloc
WK 1 you pay all bills and all living expenses with Line of credit.
Fridays paycheck you pay it off/might be short pending bills due that week or may not need to transfer whole check to zero out the balance.

Wk 2 pay that weeks bills and all living expenses
Fridays paycheck you pay it off/might be short pending bills due that week or not need whole check.

It's what the wealthy do, use line of credit as cash flow.

So if you made a 2k house payment and tomorrow you need a new fridge. Pay the 2k to the line of credit, and turn around and take 2k back out for a new fridge. If you give that 2k to a loan you cant get it back like you can with revolving credit.

People use these to throw chunks 10k or more at mortgages, cars loans and other monthly payments.
We have all heard the saying you borrow for a house or car you pay for the bankers house or car first then you start paying of yours. It's because the loans are set up as Interest first payments.

I know when rates were low this was happening a lot with investments but I don't believe with the rates where they are at now that it is as much.  And I believe the better the rate the more collateral you need.

We haven't used car loans in decades and my house has been paid off for a while now and we have been paid by are CCs for 25+ years as we never carry a balance.  We basically just have monthly expenditures.  If this crypto cycle is good I could probably retire but I think I will go through one more cycle first.

While you have been looking at these, I know your bank doesn't offer it, but has anyone else given you a rate?

[holmanjp]

Apr 9, 2024 9:09:25 GMT -6 Purp1eOne said:

Apr 9, 2024 8:45:54 GMT -6 holmanjp said:

No it's not lump sum, it's revolving. You only need to make interest payment, but in my mind that's the definition of retarded. Just like a CC but backed by your homes equity. So lower interest rate than CC and normally higher limits, Around the same interest rate as refi, or 2nd mortgage. Pending your credit score and income to debt ratio you can get a limit for up to 90% of homes equity. Example, 400k house - owe 225k = 140k revolving credit. Aven offers one with CC attached, it has unlimited 2% cash back. People are using these for all expenses and payments, Each paycheck they get they deposit up to what is owed into the heloc. The rest stays in checking or savings for times when you might have spent more in a month than you made.

If you make 10k a month and had a PLOC/CC or Heloc
WK 1 you pay all bills and all living expenses with Line of credit.
Fridays paycheck you pay it off/might be short pending bills due that week or may not need to transfer whole check to zero out the balance.

Wk 2 pay that weeks bills and all living expenses
Fridays paycheck you pay it off/might be short pending bills due that week or not need whole check.

It's what the wealthy do, use line of credit as cash flow.

So if you made a 2k house payment and tomorrow you need a new fridge. Pay the 2k to the line of credit, and turn around and take 2k back out for a new fridge. If you give that 2k to a loan you cant get it back like you can with revolving credit.

People use these to throw chunks 10k or more at mortgages, cars loans and other monthly payments.
We have all heard the saying you borrow for a house or car you pay for the bankers house or car first then you start paying of yours. It's because the loans are set up as Interest first payments.

I know when rates were low this was happening a lot with investments but I don't believe with the rates where they are at now that it is as much.  And I believe the better the rate the more collateral you need.

We haven't used car loans in decades and my house has been paid off for a while now and we have been paid by are CCs for 25+ years as we never carry a balance.  We basically just have monthly expenditures.  If this crypto cycle is good I could probably retire but I think I will go through one more cycle first.

While you have been looking at these, I know your bank doesn't offer it, but has anyone else given you a rate?

My bank has offered me one, just need to transfer from checking into it, just a click of a button online or on app. I will run my checking at zero balance and use heloc as overdraft protection. No fee involved. My rate is quoted as 7.25 locked. (The Aven one with attached CC is 9.25%) I wanted to get this started while still employed. I'm in same boat as you I only have living expenses and a couple zero interest loans. My refi is at the end and will be paid off in half the years, rate on that is 3.5% right now I only pay $50ish a month interest and it is then lower each month. I should clarify my living and daily expenses will be charged to my CC, then paid off without interest owed.

I really won't even use the HELOC until I'm done working. Just it's easier to get credit when you don't need it vs when you need it most. When I'm not employed if I want to make a big purchase I will be able to. Then sell small amounts of crypto each month. I honestly believe near the top of this run if I sell into USDC and earn 5.1% that interest payment should give me more than enough to live off comfortably. I could take a massive hit and start drawing my pension, but do not want to just forfeit that lost income. In 12 years I can start withdrawing from it without penalty. I just need enough to get by on for 12 years.

[Purp1eOne]

Apr 9, 2024 10:40:04 GMT -6 holmanjp said:

Apr 9, 2024 9:09:25 GMT -6 Purp1eOne said:

I know when rates were low this was happening a lot with investments but I don't believe with the rates where they are at now that it is as much.  And I believe the better the rate the more collateral you need.

We haven't used car loans in decades and my house has been paid off for a while now and we have been paid by are CCs for 25+ years as we never carry a balance.  We basically just have monthly expenditures.  If this crypto cycle is good I could probably retire but I think I will go through one more cycle first.

While you have been looking at these, I know your bank doesn't offer it, but has anyone else given you a rate?

My bank has offered me one, just need to transfer from checking into it, just a click of a button online or on app. I will run my checking at zero balance and use heloc as overdraft protection. No fee involved. My rate is quoted as 7.25 locked. (The Aven one with attached CC is 9.25%) I wanted to get this started while still employed. I'm in same boat as you I only have living expenses and a couple zero interest loans. My refi is at the end and will be paid off in half the years, rate on that is 3.5% right now I only pay $50ish a month interest and it is then lower each month. I should clarify my living and daily expenses will be charged to my CC, then paid off without interest owed.

I really won't even use the HELOC until I'm done working. Just it's easier to get credit when you don't need it vs when you need it most. When I'm not employed if I want to make a big purchase I will be able to. Then sell small amounts of crypto each month. I honestly believe near the top of this run if I sell into USDC and earn 5.1% that interest payment should give me more than enough to live off comfortably. I could take a massive hit and start drawing my pension, but do not want to just forfeit that lost income. In 12 years I can start withdrawing from it without penalty. I just need enough to get by on for 12 years.

It would likely be more difficult to get once you have retired so it is probably best to do it now.

I am still a little cautious doing the crypto interest thing after what happened last year.  Are you using coin base?  The only thing I hold over is bitcoin the rest I sell out of.

[holmanjp]

Apr 9, 2024 11:36:18 GMT -6 Purp1eOne said:

Apr 9, 2024 10:40:04 GMT -6 holmanjp said:

My bank has offered me one, just need to transfer from checking into it, just a click of a button online or on app. I will run my checking at zero balance and use heloc as overdraft protection. No fee involved. My rate is quoted as 7.25 locked. (The Aven one with attached CC is 9.25%) I wanted to get this started while still employed. I'm in same boat as you I only have living expenses and a couple zero interest loans. My refi is at the end and will be paid off in half the years, rate on that is 3.5% right now I only pay $50ish a month interest and it is then lower each month. I should clarify my living and daily expenses will be charged to my CC, then paid off without interest owed.

I really won't even use the HELOC until I'm done working. Just it's easier to get credit when you don't need it vs when you need it most. When I'm not employed if I want to make a big purchase I will be able to. Then sell small amounts of crypto each month. I honestly believe near the top of this run if I sell into USDC and earn 5.1% that interest payment should give me more than enough to live off comfortably. I could take a massive hit and start drawing my pension, but do not want to just forfeit that lost income. In 12 years I can start withdrawing from it without penalty. I just need enough to get by on for 12 years.

It would likely be more difficult to get once you have retired so it is probably best to do it now.

I am still a little cautious doing the crypto interest thing after what happened last year.  Are you using coin base?  The only thing I hold over is bitcoin the rest I sell out of.

Yes Coinbase