Tuesday, September 18, 2007

My Budget Shot to HELOC


Well, I knew it was coming. The windows on my rental house have now all been replaced, to the tune of $6800.

So there goes all that nice debt reduction over the past few months. When I reconcile everything at the end of September, I'm going to be deeper in the debt-hole.

The money will come out of my HELOC. Two years ago, I got a $30,000 line of credit for repairs to both of my homes. Reroofing my residence, waterproofing the basement and making other deferred-maintenance repairs used up $20,000 of that line. I'm now about to tap most of the rest.

The one good thing is that this will not affect my cash flow each month since the monthly payment of $280 per month remains the same, whatever amount I owe. I suppose it is also good that the line of credit has a fixed interest rate of 6.75%.

Still. . .

One moment I'm focused on taking a vacation, and the next, I'm going deeper in debt.

I don't have to make a decision on the vacation until after January. So I'm putting it on hold to see how my finances hold up through Christmas and what my income tax refund is likely to be. (I guess that's another "plus." I won't have income from the rental this year and I will be able to take the loss as a deduction.)

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