OT-Home Equity Loan Info Needed

Paterno · Oct 17, 2005

I keep coming back to Rx for all my non-sports questions so I will ask for some information on home equity loans. I just bought my first townhouse a couple months ago and I am thinking about paying off my credit card debt and having some work done to my place. Dont know enough about home equity lines?

My house has been appraised for approx $190k. I currently have 2 interest only mortgages totaling $162k for equity of $28k.

I want to borrow $20k but I dont know if this is too much. Do I have to wait and have house appreciate more? Do I have to own for at least a year? What are rates and typical costs?

By the way, my credit score is 720 range. I dont really have any other assets other than house and car.

Thanks in advance for all your responses!

TTinCO · Oct 17, 2005

I've seen a lot of offers for up to 125% LTV, but I'm sure that they gouge you. What you are probably looking to do is refi your 2nd at a higher amount to produce the cash back.

$20K should not be a problem-it's not at all tough to get 100%, and you'd be slightly below that.

joeyfitzclick · Oct 17, 2005

Reasonable interest rates are still available up to 90 % LTV. After that you are looking at paying a premium for money after that.

WorldNumberOne · Oct 17, 2005

look into a equity line of credit.. ELOC ..

JimmyHoffa · Oct 17, 2005

Contrary to above posted opions...

Get OUT of those intrest only loans into a conventional loan ASAP. Then worry about paying off the credit cards and fixing up your place. Intrest only loans are killers because you're not paying down any principle. If you're not paying down any principle you're not building equity aside from the rising property values. Property values do not always rise as they have been these past years.

sherman · Oct 17, 2005

Jimmy Hoffa said:
Contrary to above posted opions...

Get OUT of those intrest only loans into a conventional loan ASAP. Then worry about paying off the credit cards and fixing up your place. Intrest only loans are killers because you're not paying down any principle. If you're not paying down any principle you're not building equity aside from the rising property values. Property values do not always rise as they have been these past years.

he has the option t pay the principal...
Scnit feel free to email me if you like....

Paterno · Oct 17, 2005

Exactly..I have the option to pay down principal but my main concern is cash flow at this stage in my life..I am just trying to consolidate my debt to lower interest rates with tax advantages. I just wasnt sure about timing and % of debt to equity banks allow you to borrow.

Thanks for the input. Sherman-I might email you to get some clarification on some items.

sherman · Oct 17, 2005

SCnit said:
Exactly..I have the option to pay down principal but my main concern is cash flow at this stage in my life..I am just trying to consolidate my debt to lower interest rates with tax advantages. I just wasnt sure about timing and % of debt to equity banks allow you to borrow.

Thanks for the input. Sherman-I might email you to get some clarification on some items.

if you are paying interest only right now scnit, be careful as the loan will readjust itself....email me anytime....

Paterno · Jun 13, 2006

Bump for another question and update. I have not refinanced bc I wanted to wait for at least a year of home ownership.

I now have $155k of debt on my $210k appraised townhouse. How much will I be looking to spend on closing costs for $30k ELOC? Anyone have any guesses of interest rate for a borrower with mid 700 credit range?

Thanks in advance!

:103631605

WildBill · Jun 13, 2006

Up to 80% HELOC generally comes with a rate of Prime minus something, say 25-50 points. Add about 50 points if you go to 90%. So you are looking at about 7.5% on your first 17k and then maybe 8% for anything over that. This is provided your bank's appraiser agrees with your $210k number. After that it is anyone's guess because that is generally treated as subprime loans. Lots of low cost HELOCs available, you shouldn't have to pay more than say $500 at most. That would cover fees and the appraisal. HELOCs are a lot easier and cheaper than refinancing and refinancing is a lot easier than buying.

oldmanTED · Jun 13, 2006

U.S. Bank was offering Prime -1.01% in May for the lifetime of the equity line of credit. Not sure whether they are still offering it for June or not.

Paterno · Jun 13, 2006

Thanks for input. I also just found this site with some pretty good info.

www.bankrate.com

One more question-Will a HELOC effect PMI or will I still be ok since my 1st mtg is lower then 80% ltv?

Brock Landers · Jun 13, 2006

SCnit said:
Thanks for input. I also just found this site with some pretty good info.

www.bankrate.com

One more question-Will a HELOC effect PMI or will I still be ok since my 1st mtg is lower then 80% ltv?

I have a mortgage at Wachovia, and have a contact there is interested, its a 100% 1st mortgage with NO PMI, none of this 80/20 crap either..LOW closing costs of about 600 bux.

Best bank/lender i ever worked with..

OT-Home Equity Loan Info Needed

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Paterno

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