Skip to main content
No. of Recommendations: 1
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!

Who appreciates all perspectives...

Premium Home Fool: Ask me a Foolish Question, I'll give you a Foolish Response!
Ticker Guide: The Walt Disney Company (DIS), Intuit (INTU), Live Nation (LYV), CME Group (CME), MongoDB (MDB), Trip Advisor (TRIP), Vivendi SA (VIVHY), Mimecast (MIME), Hain Celestial (HAIN), Royce Micro Capital Trust (RMT)
Disclaimer: This post is non-professional and should not be construed as direct, individual or accurate advice
Disassociation: The views and statements of this post are Fuskie's and are not intended to represent those of The Motley Fool or any other sane body
Disclosure: May own shares of some, many or all of the companies mentioned in this post (
Fool Code of Conduct:
Invitation: You are invited to interactively watch Motley Fool Live online television:
Call to Action: If you like this or any other post, Rec it. Better yet, reply to it. Even better, start your own thread. This is YOUR TMF Community!
Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.