Home Equity Secured Loans (HELOCS)

Planner-wannabee

There seems to be a consensus view that (HELOC-S), that is Home Equity Lines of Credit are the great emergency product for a retiree in a financial crunch and I happen to disagree. I believe that a Personal Line of Credit at a reasonable interest rate (maybe 2-5 points above prime) is a much safer deal for a retired person. I would not want to be in a position where my shelter was on the line when I retire if I do not have the money to meet a monthly loan payment. The lenders promote the correct tax advantages for HELOCs and the interest rate is cheaper, but would you not sleep better at night when you are retired knowing that you shelter was not on the hook for missing a payment? I am not promoting default, maybe a borrower can work out an arrangement on an Unsecured Personal Line of Credit to make the payments lower, but if you sign away your home as collateral, you have no bargaining power with the lender. Some unscrupulous lender types would rather get your home at an auction price than have any interest in renegotiating better terms or payment of your HELOC. I'd say go for the Personal Unsecured Line of Credit and get them while you are still working so that the lenders will give you higher limits. What are others thoughts on this subject, or am I just way out there in loony bird territory? Maybe just too much time on my hands? Please reply as I am wondering if this is the best alternative for retireing.

Thank You