Home equity line of credit = good investment?

#2 03-03-2007, 08:42 PM

On Mar 3, 12:20 pm, "hartman" <hsu...[at]shaw.ca> wrote:
- quote -

> It says in this article on home equity line of credithttp://www.credit-card-reports.com/home-equity-line-of-credit.htmlthat,
> "A 2005 study done by Harvard University shows that more than 80% of
> people over the age of 65 in USA own their own homes worth a total
> combined net worth of $3.95 Trillion.
> This $3.95 Trillion is almost 1/3rd of all Senior's wealth in America.
> Home equity lines of credit allowed these seniors to own multile
> properties, as well as create additional monthly incomes. "

When you are a certain age you don't want to put your money at risk or
spend your golden years managing multiple properties.

- quote -

> how does a home equity line of credit allow them to own multiple
> properties? it is coz of low interest on 2nd mortgages? or no interest?
> also, how does it help them make additional monthly incomes?

You borrow money to down pay another property. The rental income pays
the mortgage, at least that's the theory. It usually dosen't help
them make additional monthly income.

#1 03-03-2007, 08:24 PM

"hartman" <hsumar[at]shaw.ca> writes:

- quote -

> This $3.95 Trillion is almost 1/3rd of all Senior's wealth in America.
> Home equity lines of credit allowed these seniors to own multile
> properties, as well as create additional monthly incomes. "
> how does a home equity line of credit allow them to own multiple
> properties? it is coz of low interest on 2nd mortgages? or no interest?

Probably. But more generally because it allows them to turn the
equity in their home into cash.

- quote -

> also, how does it help them make additional monthly incomes?

Same thing -- they can take $X of equity a month as cash
by drawing on the line of credit.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

03-03-2007, 08:01 PM

hartman wrote:

- quote -

> how does a home equity line of credit allow them to own multiple
> properties? it is coz of low interest on 2nd mortgages? or no interest?
> also, how does it help them make additional monthly incomes?

The site you quoted has an interest in promoting loans. The quote from
the site may have been taken somewhat out of context, but either way;
If one has the disposition to be a landlord, and is willing to take the
risks associated with it, then these loans can be part of the equation.
Buying at the right time (read that as "buying at a price so that the
rent covers all expenses including repairs) and getting good tenants
(read that as those who pay the agreed upon rent, and don't trash the
place) well, then real estate can be quite profitable, as you will enjoy
100% of the appreciation (if even only the historic 3%/yr average) on
only a 20% down payment.
JOE

#-1 03-03-2007, 07:20 PM

It says in this article on home equity line of credit
http://www.credit-card-reports.com/h...of-credit.html that,

"A 2005 study done by Harvard University shows that more than 80% of
people over the age of 65 in USA own their own homes worth a total
combined net worth of $3.95 Trillion.

This $3.95 Trillion is almost 1/3rd of all Senior's wealth in America.
Home equity lines of credit allowed these seniors to own multile
properties, as well as create additional monthly incomes. "

how does a home equity line of credit allow them to own multiple
properties? it is coz of low interest on 2nd mortgages? or no interest?
also, how does it help them make additional monthly incomes?

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