I recently had a discussion with a man I am building a new home for. With the money he is putting towards his down payment, combined with the good price I gave him, he will have over 20% equity in his new home. I suggested setting up a home equity line of credit. If he closes on the Home Equa-Line at the same time as his long term, it will cost him nothing extra. If he chooses not to take any money out, he will just have a $40 a year fee. This is according to a loan officer at M&T Mortgage www.mandtbank.com
I told him it is important to get it set up, in the event something were to happen to him or his job, he would have a nice safety net. If he were to wait to get it set up, and something happens, he may not have the kind of credit he does now and no bank will give him a home equity line if he misses a few payments. I suggest that people get it set up while they can, but use it as a safety reserve, not for boats or other things.