Equity line of credit
I was approved for an Equity line of credit through with my mortgage company. The loan amount was for $50,000.00 to pay off credit cards and to make home renovations. The issue with the Equity line of credit was that it was 15 years with an interest rate of 7.875% and APR 8.51% with a credit score of 771-815. I have over $300,000.00 acquired equity. I will pay-off my existing mortgage by 2030. With the Equity line of credit, I would be into my late eighties- nineties. Which seems like double jeopardy. I have emergency funds and a modest amount in my 401K. With all things considered including my age is this a poor financial decision? I have not signed or finalized the loan documents yet, as I do not feel this is in my best interest. I am divorced, retired and on a fixed income. Since this will certainly impact my later years of life and realistically there could be lifechanging events either medical or health issues that comes with aging. Therefore, my home that would be placed under extreme financial obligation if the monies is not repaid or leaving my only surviving beneficiary with an overwhelming financial situation and I do not have siblings and both parents are deceased. What do you recommend?
Terry Says
Whew — I recommend some independent advice regarding your entire situation with a FIDUCIARY, fee-only financial advisor, who is not trying to sell you anything.
There may be a much better solution. You might even be better downsizing to a senior community at this point — paying rent, but not an upfront fee.
Please click on this link and watch the video and contact Pam at Wealthramp to be matched with an advisor you can trust — before you take this step. Remember, just because the bank “approved” you, it doesn’t mean that is in your best interests.
