What is a HELOC?

Thinking of moving? Here we tell you about a HELOC. What is a HELOC, you ask?

Do you have the funds you need to downsize?

Are you wanting to buy your next home before selling your current home?

Do you know whether it’s feasible for you or not?

These are questions we get asked all the time. We help baby boomers and above downsize out of their current home and right size into their new home.

One of the big questions that we get asked by clients who are downsizing, is how do they manage the financial side of everything. Oftentimes, we find that our older clients tend to have most of their assets tied up in either their homes or in retirement accounts, and neither of these assets provide easy access to cash. If you pull a large sum of money out of your retirement account, you’ll most likely incur a really hefty fee. A lot of our older clients are on fixed incomes and don’t have a lot of money in savings. They’ve worked really hard over the years and have diligently paid off their homes, so, of course, all of their cash is tied up in that one asset. If that sounds like you, one of your easiest solutions is to set up a home equity line of credit or HELOC.

A home equity line of credit will give you the access to your home’s equity, which you can then use to fund the transition into your next home. I probably don’t need to tell you this, but I’m going to, keep in mind the equity in your home should only be used for either repairs or improvements to your next home, or to purchase your next home. And like everything else related to downsizing, our advice is to always start early. It is best to open up your home equity line of credit before you actually need it. I have one on my own home and I think of it as a safety net. It’s not something that I touch, but it is there if I need it. The cost to maintain my HELOC is about $65 a year and that seems pretty cheap for the peace of mind it gives me.

Do you have other questions related to financing, downsizing, or real estate? Get in touch with us. Think of us as your resource for all things real estate.

Elevated service, Elevated results.

What is a HELOC?
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