[101voodoo]

Actually a HELOC if managed properly is a great way to consolidate and reduce debt to manageable levels.

Instead of having 5-6 credit cards with interest rates of 15-20% and payments 0f $4-600 monthly, you would be able to drop the pmt drastically and reduce the interest rate by 2/3 or more.

The secret then is to have the discipline to NOT again run up the credit cards or use the HELOC as an ATM.

[Claud]

You’re right as far as when a person is already in a bind, but better still is to have the discipline to avoid debt in the first place. The guy would have had the house free and clear by 2000—and that’s with no extra payments.

I hope Karl Denninger gets a hold of this story....this hits all his hot button issues.

[Pecos]

“The secret then is to have the discipline to NOT again run up the credit cards or use the HELOC as an ATM.” When was the last time you saw an add for HELOCs that emphasized discipline? I'm just sayin’... As I see it, banks have felt comfortable in giving people loans for more than 100% of the value of the houses because Congress has kept sending signals that the Federal government will bail everyone out. FDIC coverage went up = bank has to have less actual liquidity. Community Re-investment Act = bank has to have less actual liquidity. Bailout legislation = bank has to have less actual liquidity. etc. The banks of recent years have not had to worry about risk. Lendees have not had to worry about risk. Wall Street has not had to worry about risk. And then reality struck. Sooooo, a lot of companies are sitting on their cash, waiting out the convulsions and twitchings of Washington. And the economic recovery takes that much longer.

[napscoordinator]

You know what is funny about your post. I bet you never took a HELOC out to pay off bills....The folks who say, this is a great deal, if you manage and control yourself are always the ones who are responsible already.....Of course, this is no surprise to me, as you are a. FRiend and we for the most part are very responsible with life. You can tell that all of us care about the U.S. and see what debt does to a country so we want to ensure our own lives are managed correctly whether it be family, finances, beliefs, life, etc. Glad you are on our side!!!!!