Ask Terry Questions HELOC rate

HELOC rate

By Terry Savage on September 05, 2023 | Financial Planning / Retirement

My parents have a home equity loan with a flexible rate. They have had the loan for a few years and their monthly payment has skyrocketed in the past year. Their house is paid off but they do not have enough in the bank to pay down the HELOC very much. They plan on moving soon b/c they can no longer afford the large monthly payments that are going mostly toward interest! Do you have any advice? They are over 80 years old FYI. Thank you!

Terry Says

I’m glad you wrote now! Yes, they are caught in the senior trap of housing that suddenly costs more — not only because of rising HELOC rates, but future repairs and property taxes.
The time to confront this is NOW. The “this” is the decision to leave their long-time home.

This is the time and the season to start looking for alternatives — senior living communities. Do the research and then take them on an “adventure” to look at new possibilities. It’s tough to leave the family home. But doing it while both are healthy and can make new friends, and take advantage of community opportunities to socialize is really important.

If you can take the lead in this now, I promise it will save heartache in the future when they might not be able to move together. Please let me know what happens.

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