I'm 67, own two homes outright worth $2.8 million, but I have $19,000 in credit-card debt. Should I get a HELOC?

By Quentin Fottrell

'My son was recently diagnosed with lymphoma, which may be related to burn-pit exposure during his military service in Afghanistan'

"I have struggled to find steady employment in my town and have been doing food delivery and house cleaning to help make ends meet." (Photo subject is a model.)

Dear Quentin,

I am 67 and own two homes outright with my adult son. Together, the properties are worth $2.8 million, but despite having significant home equity, my income is quite low.

I currently have about $19,000 in credit-card debt. All of my accounts are current, I have no car loan, and my credit score is approximately 790.

The annual property taxes on both homes total $15,000. I live in one, and my adult son lives in the other. He is a disabled combat veteran, and pays property taxes and utilities.

My son was recently diagnosed with lymphoma, which may be related to burn-pit exposure during his military service in Afghanistan.

If his VA disability rating is increased to 100%, he may qualify for a significant property-tax reduction or exemption, depending on our state's rules.

Given my financial situation, would it be unwise to take out a HELOC or another type of loan to pay off my credit-card debt?

I have struggled to find steady employment in my town and have been doing food delivery and house cleaning to help make ends meet.

Mother & Homeowner

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You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

Taking out a HELOC is preferable to what you're paying now in interest.

Dear Homeowner,

Generally, it's not a great idea to swap unsecured debt for secured debt.

That's exactly what you would be doing if you took out a home-equity line of credit to pay off your $19,000 credit-card debt. Your credit score is excellent, so you clearly do pay off your bills on time. You have one bill to focus on paying off.

However, taking out a HELOC is preferable to what you're paying in interest. If you get a loan between 8.5% and 9.5%, you would be paying between $142 to $160 in monthly interest payments, which sounds much more doable than what you're paying now.

Given that the APR on your credit card is probably between 15% and 29%, you would be paying anywhere from $240 to $460 a month to service this debt. You cannot keep making food deliveries to keep up. You will either run out of stamina, money or both.

If you are 67 with two houses worth $2.8 million in total and working a part-time job delivering food, something is off. There is an imbalance in your life because you are house rich and cash poor, and the gap between the two will only worsen over time.

Your son is bringing you no income. Renting that house and/or renting a room in either home would be a good start. If you were able to earn $3,000 a month in rental income, you could pay off this credit-card debt in a year.

As you say, if your son's lymphoma is connected to burn-pit exposure and his disability rating increases, he could become eligible for additional VA compensation and significant property tax relief. He could and should seek out free financial assistance for veterans.

Changes will involve some hard conversations with your son, who will either have to find accommodation through Veteran Affairs, or move in with you, even if it's temporary. (There are also grants available to disabled veterans to help upgrade their primary residence.)

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Symptoms vs. solutions

Is this credit-card debt due to a one-time event or daily expenses? I understand that things may happen that you may or may not be able to control. Consider building or bulking up an emergency fund so this kind of credit-card debt doesn't happen again.

The credit-card debt could be a symptom of a larger problem: You don't have enough money coming in to pay your expenses (utilities, property taxes, food and miscellaneous costs). So something has got to change. You are treading water at the moment and slowly sinking.

What is your monthly Social Security? Does your son receive VA disability? What are your monthly living expenses? Do you both get along? Would it be possible for you to live together? It may be that keeping two houses is a luxury you can't afford.

Remember, if you are spending more than you bring in, refinancing the credit-card debt only buys time. If the income shortfall is temporary - while you wait for your son's VA claim or until you find better employment - a lower-interest loan is a reasonable bridge.

If renting your son's house does not work and/or renting a room in either house, it's time to either downsize and release some of that $2.8 million in home equity, possibly by selling one house. Taking out another loan at this point would be pointless, given the costs and interest rates.

You are 67; it should be a time for slowing down and smelling the proverbial daisies. You have the ability to do this - if you are willing to make some hard choices. Actually, they should be very easy choices, given the life that awaits you.

Downsizing one or, preferably, both of these properties will reduce both your and your son's living expenses, and free up some much-needed cash so you don't have to spend your time delivering food when you should be enjoying retirement.

The challenge for you is to figure out the least disruptive way to convert some of your home equity into enough monthly income to support both of you. That might mean a HELOC, a reverse mortgage on one property, if that is enough to get you over this hump or, if all else fails, renting or selling one home.

Act now before you are in a desperate situation where your choices are more limited.

Don't miss: 'I'll happily wait': Does delaying Social Security make sense for high earners like me?

By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

More columns from Quentin Fottrell:

I'm 67 with a $140,000 pension. Should I wait until 70 to claim Social Security so my wife gets more?

'I claimed Social Security at 62': At 76, I'm working at Walmart. Why do I still owe payroll taxes?

'I was shoveling sidewalks at 8 years old': I'm a 73-year-old boomer dad with two kids. Here's what I teach them about finance

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-Quentin Fottrell

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07-18-26 1430ET