This has been the big question of the past few months. Some financial advisers suggest that borrowers cash out their HELOCs to protect against possible freezes.

But, others are suggesting that panic-stricken withdrawals are a bad bet. KSN News reports:

“If they are paying interest just to hold that money to me that’s counterproductive,” said Darryl Bauchert of Columbus Financial Group.

Also in these tough times, losing a job isn’t all that unrealistic and that means you may not be able to pay for your home.

Now you’ve secured a loan with an asset that you may lose.”

In my opinion, holding HELOC money can be smart - but only if you plan to use the funds in the next six months or so. There’s no point in paying interest on money you’re not using. But, as we’ve seen, there is definitely a risk of not being able to withdraw funds in the future.

See Also:

Will a Home Equity Line Save You During the Crisis?

HELOC Foreclosures

Baby Boomers Suffer From Home Equity Line Withdrawals

Tags | Heloc, heloc crisis, home equity line of credit, mortgage crisis