If you will not need money in the future is it worth the hassle to get a line of credit (home equity) anyway?

Question

I own two houses out right and have a good retirement income. I don't see the need but friends and a tax accountant say it is a good idea for "just in case ". I have ample savings to handle any foreseeable future problems. I dislike filling out he paperwork and getting the free house appraisal ( I am big on keeping life simple)

Answer 1

Your savings are for "just in case" situations. Don't do it. Put some of your money in a money-market account and use it only for emergencies like new AC, fix siding, car wreck, or whatever. Should equal 3-6 months expenses.

Answer 2

I see a way in which this could be beneficial to you, but not truly necessary. Home equity loans are tax deductible, and if you chose, you could invest this cash to try to produce a stream of income that would outweigh the cost of the loan. However, if you do not feel it's worth the hassle, then it's probably not. Unless your cash reserves are extraordinarily low, then I would see no reason to bother with paperwork that you don't want to. Owning your houses, you know that this particular source of funding is available if you ever determine you need it.

Answer 3

You could use that line of credit to invest the money and make more than what you are paying of interest and keep the rest.

Life is simpler when you have more money.

NOTE: I am the Top 5 Answerer in this category.

Answer 4

You may want to discuss this with a finacial profesional such as an paid adviser/manager.