HELOC Payments
Terry, thanks so much for your columns/responses and books. I’ve learned much from you through the years.
I am 67 and plan to retire next year. I’ve upgraded my home appliances/windows/doors and a few other big ticket items, using my HELOC. I have a balance of almost $20,000 left to pay off.
I have begun collecting social security, using the entire monthly checks to pay down the debt, which will be completely paid off before I retire. I’m re-thinking that strategy, however. Should I be using that SS to build savings or should I continue to pay down the HELOC. Down the road, I plan to get a reverse mortgage, if necessary; I have no heirs to consider leaving the house to, so want as much equity as possible. I’ve also got a comfortable amount still available on the HELOC, should I need it. Since the value of my home has increased significantly, I plan to increase the HELOC amount, but not use it. Are these good strategies? Thank you!
Terry Says
I worry about Home Equity Lines of Credit because when — and certainly it WILL happen — interest rates rise, those rates will rise sharply. I suggest that you postpone retirement a few years, and pay down that HELOC (you can still leave it in place for an emergency). Then you will be able to save more as well as get out of debt.
