HELOC risk and downside

[Todd Smith]

All I here about is how great HELOC is- How about the downsides: 1) variable rate 2) risk your home if used 3) tax deductible only if used on the same dwelling

[Alexander Felice]

helocs are great, they do have downsides. One being that HELOC's suffer the first hit when liquidity in the market dries up.

Sitting on that heloc as a means to purchase in a downturn might sound like a good strategy, but in most downturns liquidity is going to dry up and banks will close many un-borrowed heloc balances (and might call some that are open).