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My elderly parents have two HELOCs they got years ago, I think to pay for our college tuition and a car. They have long been paid in full. They are just sitting there.
My brother is freaking out that they need to be eliminated somehow. My parents have a ridiculously high credit score.
Can anyone think of any reason why we should do something about these and if so, what?
It's significantly more difficult to access a HELOC than it is to fraudulently use a credit card.
A HELOC is simply a line of credit minus the card. Generally (I guess there could be exceptions to this but I've never heard of one) a homeowner has to go to the bank, or at the least, do a transfer online, to access the HELOC.
Closing the HELOCS would make a slight and temporary dent in the parents' credit score. I don't think it's a big deal either way. The bigger deal is the brothers' involvement with the parents' finances. Are the parents mentally incompetent?
My elderly parents have two HELOCs they got years ago, I think to pay for our college tuition and a car. They have long been paid in full. They are just sitting there.
My brother is freaking out that they need to be eliminated somehow. My parents have a ridiculously high credit score.
Can anyone think of any reason why we should do something about these and if so, what?
Nothing wrong with the HELOCs just being there.
What IS wrong is your brother's reaction to them. Is there a reason why this is even anyone else's business?
First of all, LOC's have an expiration date and will die of natural causes, whether used or not. I got a LOC when I purchased my current home ten years ago. My bank notified me that the LOC will expire in June of this year when it reaches the ten year deadline. I just finished re-applying for a new one good for ten more years.
I have a zero balance and use it only occasionally when I need money in a hurry, it's a convenience item for me.
If you're worried about it, find out how old it is, it might well have already expired if it hasn't been used in a long time. Brother dear may be worried about nothing...
A LOC is always a good idea, chiefly because you never know when you'll need a source of finance. No, you don't spend your home's equity on trips or cars or other things. But as an emergency back up? Absolutely.
My elderly parents have two HELOCs they got years ago, I think to pay for our college tuition and a car. They have long been paid in full. They are just sitting there.
My brother is freaking out that they need to be eliminated somehow. My parents have a ridiculously high credit score.
Can anyone think of any reason why we should do something about these and if so, what?
No, unless they want the peace of mind from not having a lien on their property.
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