Paying down my line of credit

MY MORTGAGE IS 230000.I HAVe 30000 LINE OF CREDIT. I have 70000 in 401k. No liquid cash..do I save up 3months emergency fund or pay off line of credit. I make 90000 a year. Im married my kids are all in early 20s.

Terry Says:  I’d like to help — but I’m not quite sure I understand your situation!  Have you taken down — ie, already borrowed $30,000 on a home equity loan?  If so, are you aware that when rates rise, the payment will likely go up — and that if it is an “interest-only” line of credit, you are going to be on the hook for a balloon payment at some point in the future?

If that describes your situation, then you really have to start saving money from your salary — while making the regular payments on your existing line of credit.  This should be a high priority for you as you approach retirement — even while you are still contributing to your 40l(k) enough to get the match,  if there is one, and future tax-deferred growth on your retirement funds.

Please write back if I haven’t diagnosed your situation correctly.