Talk me out of a home equity loan...

[Whiteroom_Guardian]

So like many middle aged dentists before me I left my high paying job to move (back) to the mountains and now I make like 1/3 what I used to make. Pretty much the only tangible thing I really have is my house (duplex, rented back on the east coast). Trying to actually get my head above water somehow and get out of doing labor jobs forever. May have an investment opportunity in the next few months, plus I am trying to switch to a commission based gig which means no income for a month or two (or longer if I suck at it).

How fucking stupid is it to take on more debt? Please just tell me it's really stupid and I'll stick to lifting heavy objects for billionaires.

[TAFKALVS]

I hope fastfred chimes in

[The Reverend Floater]

Were you asleep for the last decade? Bad Idea Jeans. Yeah, it might be a short term fix but the risk you take is life-altering-bad if it goes south.

[shroom]

^lol

[babybear]

without really offering an opinion, it seems like you are ambitious from the very little I pay attn here- so if you have a decent amount of equity in your place, taking out a heloc is one of the cheapest ways to borrow money.
you can even write off the interest on your taxes, which honestly kind of seems like BS, but the option is there currently
good luck!

[fatnslow]

How much are we talking here ? It it's like 10-20 k and it represents a small portion of your equity a heloc suggested by BB probably won't be too bad. If things don't work out you'll have a decent monthly reminder for next time you consider a similar move.

[fastfred]

Lucky for you I've been checking tgr watching reruns of the tv show mom and texting this chick. Unfortunately looks like she is going to blow me off to pick up an extra 4th of July shift in the er. Now she's pissed that I won't take her to my high school prom dates wedding in Boulder and im waffling about a trip to maine w her. So she won't reup my low t meds inhaler or steroid prescriptions.

I digress. Sorry. Lucky for me my dad was a dentist so to help me out he bought me a modest home in a ski resort town to help support my ambitions to become a pro.

All cash purchase and the dumb ass put it in my name only.

That was like twenty years ago and now the shit hole is worth way too much. Like yourself I'm a blue collar guy who is one of the best dick swinging framers in Colorado. Never met a house i couldnt build. I've debated taking some cash out to go soul searching and find my true self but when I really think about it the money is better kept as equity. And who the fuck really wants to go find themselves anyways.

Think long bro not short. Someday I'll cash in sell out. Buy a trailer in and moab and live happily ever after on hundreds of thousands in equity I built over a life time of hard work in a ski town.

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[old goat]

IMO borrowing money is for making money--buying a house (no guarantee) or starting a business (definitely no guarantee), not for day-to-day expenses, things that lose value like cars, investments for the most part--especially investments that someone tells you can't lose.
OTOH if you borrow a LOT of money and can't pay it back the bank will kiss your ass and you could wind up president.

[Obstruction]

IMO borrowing money is for making money--buying a house (no guarantee) or starting a business (definitely no guarantee), not for day-to-day expenses, things that lose value like cars, investments for the most part--especially investments that someone tells you can't lose.
OTOH if you borrow a LOT of money and can't pay it back the bank will kiss your ass and you could wind up president.

Amens.

[neufox47]

So like many middle aged dentists before me I left my high paying job to move (back) to the mountains and now I make like 1/3 what I used to make. Pretty much the only tangible thing I really have is my house (duplex, rented back on the east coast). Trying to actually get my head above water somehow and get out of doing labor jobs forever. May have an investment opportunity in the next few months, plus I am trying to switch to a commission based gig which means no income for a month or two (or longer if I suck at it).

How fucking stupid is it to take on more debt? Please just tell me it's really stupid and I'll stick to lifting heavy objects for billionaires.

What is the money for? Paying off credit cards or a new business, some of both?

[Marshall Tucker]

IAll cash purchase and the dumb ass put it in my name only.

Damn that made me laugh. in full disclosure I am a CPA.

Think long bro not short.

[thefortrees]

you can even write off the interest on your taxes!

Can you get the same tax benefit with a home equity loan vs a HELOC?

[Whiteroom_Guardian]

What is the money for? Paying off credit cards or a new business, some of both?

I have a card that could use some help. Otherwise, it would be for a possibly buying into an already established successful business that is expanding to my town and/or floating me along for a month or two while I start a new career.

[Mustonen]

Can you get the same tax benefit with a home equity loan vs a HELOC?

All HELOCs are home equity loans.

[Obstruction]

Can you get the same tax benefit with a home equity loan vs a HELOC?

As Mustonen noted HELOC (Home Equity Line of Credit) is still a home equity loan.

As far as tax deduction the newly fucked up tax code (as opposed to the old fucked up tax code) has made the home mortgage loan interest deduction much less useful ($24k standard deduction & cap on mortgage interest & cap local tax deductions). Gonna guess based on what OP posted he's not going to be in a position to use any deductions that a home equity loan might provide.

[Skistack]

Takes money to makes money....


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[El Chupacabra]

I left my high paying job to move (back) to the mountains and now I make like 1/3

the only tangible thing I really have is my house

Trying to actually get my head above water somehow

plus I am trying to switch to a commission based gig which means no income

Edited for emphasis on the points that stood out to me.

WG - if you add more debt onto your mortgage, and everything blows up with the new plan, can you make all the payments? Or are you looking at foreclosure? Are you willing to risk losing the house?

[Marshall Tucker]

Gonna guess based on what OP posted he's not going to be in a position to use any deductions that a home equity loan might provide.

Well now. I beleive the HELOC would be against a duplex he owns and is renting in another town. given all the facts I like my odds (as a deduction against rental income).

[Whiteroom_Guardian]

All signs point to not doing it. I owe a fair amount less on my house than it's worth, but still probabaly wise to not fuck with it.

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[Jong Lafitte]

I rent and owe. Here's one thing I'd saY:

You can sing the thread title to the tune of 'Take Me out to the Ball Game'

[TNKen]

With reference to the opportunity going down the shitter.....

Was sitting with my law partners about 3:30 one morning working on a very large loan transaction for a business client. We had the standard malpractice insurance in place which paled in comparison. I asked if we needed to bump up our coverage, to which one of the guys said "Naah, there's always Chapter 7."

Always have to know that's a possibility and plan accordingly.

[AK47bp]

Have you considered a reverse mortgage?




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[MontuckyFried]

I have a card that could use some help. Otherwise, it would be for a possibly buying into an already established successful business that is expanding to my town and/or floating me along for a month or two while I start a new career.

Definitely no. If you get into financial trouble (loss of job, whatever), the credit card companies can only do so much and at worst, charge off and you deal with collections. At least you still have your house. If the business you're thinking about buying into goes south (which trust me, that can happen in the blink of an eye no matter how promising), then it goes down. Oh well. At least you still have your house. But if you put your house on the line in association with any of those things and life hits? Yeah, you lose your house and that's no bueno. Absolutely, 100% NOT worth the risk. Again, take it from me as I've been fighting off creditors lately after my business went downhill. REALLY, REALLY happy I didn't do a second mortgage on my home when times were better.

[fastfred]

I have a card that could use some help. Otherwise, it would be for a possibly buying into an already established successful business that is expanding to my town and/or floating me along for a month or two while I start a new career.

there is no such thing as a successful established buisiness all businesses are doomed for failure

only stupid people go into business for themselves

[jackstraw]

Well, if you did, go to a credit union instead of bank because they don't have the same regulations, they're non-profit, and can generally give you a better deal. And the bankers hate them for it.