Quick Tips to help take control of your personal life.

REAL Home Economics from a frugal, practical, fiscally savvy working mom.

Wednesday, January 27, 2010

Equity Line as Low Cost Insurance


IF you own a house with some equity built-up, do you have an equity line set-up? If not, do it TODAY and then FORGET you have it.

What this does is provide you with access to low interest cash in the event of an unplanned, hopefully once-in-a-lifetime desperate situation such as an extreme medical issue or extended period of unemployment. It gives you a way to pay your critical bills such as a mortgage so you have time to get through the short-term situation or readjust your lifestyle to accommodate it. It's the breathing room you need so you can focus on resolving the primary issue with a good night's sleep.

- Unused Home Equity Lines typically only charge small annual fee around $50.
- Mine was free to apply for.
- Don't go crazy interest rate-shopping because you'll hopefully never use it and rates are variable and tied to published standard rates such as "prime".
- Do not get a check book for it (too tempting for some).

More information on Home Equity Lines

I heard this advice from Suze Orman years ago.

Have a good day,
Practical Jenn

1 comment:

  1. Jenn's advice about obtaining an equity line is spot on. I would also add that the best time to apply for one is when you don't need it!

    Joyce H.