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HELOC Questions


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Okay, I don't have a home, but my mom owns a condo.

She is 65 and still working, but retirement is iminent.

She purchased the condo in 2003 on a 15-year fixed rate note. She pays her mortgage and her condo association dues monthly and has no problem (currently) affording them.

About 2 years ago, in an effort to make the condo more handicapped friendly (she is not disabled, but she works in the medical field and sees what happens when people are not prepared and do suddenly become disabled), she took out a HELOC to make some minor renovations.

Currently, she has no issues with affording any of this, plus her standard bills.

However! Sometime soonish (definitely the next 5 years), she will have to retire. When she does that, her income will be reduced. Like many people in the current market, her investments will be a primary source of income with her Social Security. At that time, she may or may not have enough to pay the HELOC.

So, we are trying to make her understand that she may need to pay it off. She feels that what she is currently paying on it is enough. After a mention in another thread by someone (I think it was Morrow, but I could be wrong), I am concerned that she may be paying only the minimum, which could default to interest only.

Is there an easy way to tell this on her statements, or will we have to delve into her paperwork to find out?

Is it worth it on a HELOC to pay direct to principle or is there another trick to getting it paid down swiftly?

My mom is currently financially comfortable, but if she has any sudden medical problems, she could be in a serious financial bind. She already had one health scare 3 years ago, and had to take money out of her retirement fund to pay off the medical bills.

And I am totally going into personal fear stuff, so I'll stop now.

Any advice?

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Hello! :)++

Just so I can make sure I understand, are you wanting to know what type of a loan program she has with her HELOC? Depending on the lender, you may be able to call them up and simply ask them. If not, you may have to dig through the loan documents to pinpoint what she has.

Sorry I cannot be of more help to you.

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