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1.When you apply for the HELOC, do you have to take the funds now or can you hold off on that as a rainy day sort of emergency fund? Use your cash for repairs and keep the HELOC on the side should unexpected future expenses crop up.

There is no initial draw requirement, but there are $650 in closing costs.

As this is not my first HELOC, I am good with discipline. About 14 years ago I used a HELOC to fund a major renovation of the home (replacing 40yr old single pain windows, remodeling bedrooms, living and dining rooms, pretty much everything except the kitchen. I also used a small amount to cover a gap in the cash amount paid for the FuskieMobileā„¢, now 14yrs old. I had been paying down that HELOC when I refinanced the primary mortgage and rolled the HELOC into the home at a lower fixed rate rather than the adjustable HELOC rate.

So yes, I can defer withdrawal. I could pay for the repairs out of the eFund but that means I would have to tap the HELOC if there is another gap in employment. There is also no prepayment penalty, so I don't have to wait until the payback period to begin paying down on any debt taken.

2. What percentage of your HELOC and or Emergency Fund Cash is needed for the repairs. When locking in a HELOC be sure you have some extra buffer for getting more cash in case of cost overruns. Don't ever want to be in position of shopping for a HELOC when Credit Score took a recent hit.

The immediate repairs will likely run about $10k. My plan was for the HELOC to provide credit in the space of 1/3 the home's value. Based on Zillow evaluations, I expect the property to deliver an appraisal where that repair amount would be +/1 10% of the amount of credit available. I would likely be able to pay that down within the first year, assuming employment continues.

Of course, if it doesn't, then I will eventually be drawing more if/when the eFund runs out. Having become practiced at living frugally, the remaining 90% of the HELOC could probably carry me up to 2 years if I am unable to secure a new position quickly.

Good Luck in whichever way you go.

Thank you!

Fuskie
Who appreciates all perspectives...

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