Homeownership offers retirees cushion
that you only pay on what you use and the interest is tax-deductible if you use it to repair or upgrade your home. For retirees who want to retrofit their homes to make life easier, such as installing stair lifts, grab bars and handrails, a HELOC could be a good way to fund those upgrades and get a tax break.
Before you decide on a lender, make sure you understand the terms of the HELOC and any associated fees, says Johnna Camarillo, assistant vice president of equity processing and closing at Navy Federal Credit Union.
Some lenders might charge a service fee or a fee if you have a zero balance. Likewise, some lenders require a balloon payment at the end of the loan, which could put some borrowers in hot water. Balloon payments are typically large payments owed at the end of a loan.