I'll jump in as a fan of the home equity line of credit (heloc). I've worked in banking all my career and have used mortgages as a vehicle to grow wealth.
I've mentioned this topic before and got slammed looking for some strategy discussion on using a heloc as a tool for down years. Basically, if portfolios dip one to two years on average then a heloc should be able to help combat those short years.
Yes, I was one of the people who had their home equity lines of credit reduced, I had three different ones at the time 2008, for three different properties. All three were reduced access to bring in line with current market value of the properties.
Now My house is paid off, and I'd like to access funds versus pulling required floor $30,000 from my portfolio. I've got the 4% portfolio, but the heloc is just cushioning. $40,000 target annual spending
Home value $300,000, 80%ltv, home equity line is available credit of $240,000 or eight years of yearly floor spending. This assumes no pull from the portfolio at all,no side hustle, no other options. Ok, so housing tanks again and now I only have access to $200,000. If most markets return in two years, wouldn't I generate a greater return and reduce portfolio failure? I believe so.
So market tanks in 2018 greater than 15-20%, I pull $40,000 from heloc.
2019 market comes back, payoff heloc, and draw $40,000 stocks to replenish cash
2020 Markets are good, normal course.
Supplement with heloc part two