Take Advantage Of A Home Equity Line Of Credit HELOC

Dated: 04/07/2020

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Take Advantage Of A Home Equity Line Of Credit (HELOC)

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COVID RECESSION?  Stock market drops 32%, Mortgage rates hit a record low, Fed Interest rates drop to nearly 0%, Fannie Mae and Freddie Mac suspend foreclosures and evictions for at least the next 60 days, Tax deadlines are pushed till July 15th.

With the federal government printing 10s of billions of dollars and more to help keep banks liquidated, we see many investors scurrying away from “paper assets to real assets”.  Real things such as water, timber, and residential real estate are things that can't be inflated away. This is a time to think about hard assets. We all know that recessions typically come and go every 7 years or so. With an eleven-year run and hitting an all-time American record, the question is, "Is a recession now here?".

Let me start off by saying that everyone should consult their financial planner before making any investment decision and that interest rates will vary depending on the individual and their situation.  I wanted to bring forward that this is a time where many of us should investigate a Home Equity Line of Credit (HELOC) thus making your equity “liquid,” meaning available for real use.  This also allows you to make withdraws for emergencies. This can come in the form of a second mortgage.  A home equity loan allows you to have up to an 80/20 loan-to-value ratio.  For example, if you have a $500K home, you can have $400K against it.  So, if your current debt is $300K, you will have $100K available for emergencies or anything else you choose. As stated above, the Fed rate has dropped to nearly zero percent. Do not think for a minute you'll get it at zero; for we have seen rates ranging from 3.75 to 5% on average (Once again, rates will vary for each of us).  Another added value of obtaining the HELOC is that you can pay principal and interest, as well as being allowed to pay just interest. In these uncertain times, I would recommend reaching out to your lenders and seeing if this is a viable option for you.

I wish you all the best, be safe and we will all get through this. While we are currently in the tunnel right now, there is a light at the end of that tunnel, and we will get there. Just stay on the tracks…

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Jay Ciavarro

Cell- 973-296-1306 Office- 609-492-1511....

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