Can it be a good idea to take out a home equity loan only to invest the money in a interest bearing account?

Let's assume the home equity loan has a similar interest rate as the investment account. Asked by Fatty12 40 months ago Similar Questions: idea home equity loan invest money interest bearing account Recent Questions About: idea home equity loan invest money interest bearing account Business > Financial Planning.

Similar Questions: idea home equity loan invest money interest bearing account Recent Questions About: idea home equity loan invest money interest bearing account.

Only if you're making more interest on the account than you're paying on the HELOC, which seems unlikely. Probably the best interest you're going to get on a HELOC these days is around the mid 7s, and you're not going to find an interest bearing account that pays that much. Schelli's Recommendations Investing For Dummies, Fifth edition Amazon List Price: $21.99 Used from: $12.00 Average Customer Rating: 4.0 out of 5 (based on 82 reviews) .

Depends I'm not an economist, and it's not something I'd do, but I'm sure it depends. Sometimes, having money in an investment account makes a person feel better than having the same amount of money tied up in debt. It also depends if the home equity loan is on a home that's got an outstanding mortgage on it, or if it's on a home which is debt-free.

It also depends on the amount of money borrowed. Like I said, sometimes having money in a savings account or investment account brings good feelings which actually outweigh the feeling of extra debt on a house. Good feelings beget good feelings, good decisions beget more good decisions.

If you're doing this out of fear or worry, then that's not a good motive and you need to rethink. If the idea just occurred to you and you're not worried or fearful, then it is worth investigating for possible future action.

If you assume that the economy is going to be creating inflation (a somewhat questionable thought at this time) then you will be paying back in cheaper dollars, that's true, but the flip side is that you still need to pay it back. Yes, the interest paid on the HEL is tax deductible, but you will be paying income tax on the interest earned in the bank account. And depending on your tax rate, your taxes will likely be higher than any amount you will have earned by this investment.

Bottom line, it's very doubtful that you will make any long term money on this, unless you have other factors (carrover losses to offset gains) that you haven't told us about.

No. The loan will involve fees and the "investment" usually will be less (lowered, if need be) than the loan interest. And he investment can be wiped out, but not the loan.

They who do these things have already thought of this one. Danielpauldavis's Recommendations Know Your Interest: A Guide to Loans & Investments Amazon List Price: $25.50 Used from: $25.41 .

In this economy. I wouldn't do it. I don't know where you live.

But when and if you put your home on the market, you really want full equity. You may not get what it is worth with the realestate market being what it is right now. Most lenders want you to prove that your loan is going toward improvement of the property.

Or you will be getting a loan with higher costs than a straight home equity ( the name of the loan itself means the loan is intended to raise the equity of the property) You may get better advice from someone more knowledgeable.. this is only my opinion as a Realtor.

" "I owe 25Kmostly in credit cards. Should I take out a 9.5% home equity loan or get 0% interest cred cards til paid off? " "What are my options to pay off home equity loan if I need to sell house and house worth less than I owe?

" "I have money to invest. Does anyone have a good idea? " "which bank has a highest interest rate for money market account?

Is it better to leave money in the bank earning 4.5% interest or take it out and pay off the home equity loan @7%.

Will a bank loan money for a home higher then the appraisal.

I owe 25Kmostly in credit cards. Should I take out a 9.5% home equity loan or get 0% interest cred cards til paid off?

I have money to invest. Does anyone have a good idea?

I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.