Why near-retirees should get HELOC for only amount they really need
When we apply for Home Equity Line Of Credit (HELOC), we normally try to get maximum possible line. However, near-retirees should get HELOC for only amount they realistically need. It's good to keep debt to income (DTI) ratio low for them. As they retire and wish to take another loan (say zero percent auto loan financing deal), it might get tricky to qualify as retiree (with limited income). For the same reason, as near-retiree, it's better to go for 30 years mortgage refinancing . It would keep DTI ratio low. Also this would make it much easier to qualify for another HELOC in future as and when current HELOC's draw period is about to end. BTW, while calculating new loan DTI ratio, prospective lenders assume maximum utilization of line, even though our current HELOC loan balance might be just zero. For example, I have $80K HELOC line with 3% interest. When I re-financed my mortgage few months back, I had no current loan balance on my HELOC. However, I saw $...