Answers
household income is around 130k. we have a mortgage loan of 280,000. our HELOC interest rates is the PRIME RATE plus 3/8ths.
we got this home equity line of credit with Countrywide Financial. Our mortgage is with JP Morgan Chase. I'm wondering if I could have done better on the HELOC by going straight to JP Morgan Chase for the HELOC and possibly might have avoided the $500 closing fee? Is this a bad deal I have with Countrywide? Do others know if Countrywide is competitive. I should have compared more before I got the loan. Does Countrywide loan to risky customers and therefore expect a higher interest rate from all its customers?
you definitely should have done research before going into any loan with any bank. Most banks are prime- 0.50% and you probably should have looked around for one that didn't charge closing fees.....the good news is, do your research now, wait a few months and pay off this one with a more competitive offer.
Some Ways to Lower Your Home Equity Line of Credit Rates Owning a home must be the most precious property that someone can possess in most peoples ...
The bank is offering a line of credit sale. I pay no fees, the bank is covering all closing costs, state taxes, appraisal fees and the first year annual fee. I can take out a line of credit on the equity of my house. The rate is prime minus 1/2.
What is in it for them? Could there be a hidden downside for me? What do you think?
This sounds normal to me. They make their money on the interest and incidentally, you must have good credit becuase prime minus half is good. I don't think their costs incurred are all that much and half the time the appraiser doesn't even look inside the house. It's basically a good source of low cost credit for people with equity in their homes. (low risk for them.) I assume it's a reputable bank.
I have a mortgage & home equity line of credit with the same lender. The rate on the equity loan is currently 2.5% (prime - 3/4). I was thinking of refinancing my mortgage and taking out a little cash to pay off some credit cards. My question is, if I refinance my mortgage do I have to pay off the balance on my home equity loan?
Yes, you will need to pay it off. You won't get a refinance with an existing lien against your house.
Answer in relation to "prime" interest rate please, i.e. prime minus 1. Also list the lender.
National City Bank is offering HELOCs at prime, up to prime -1%, depending on the size of the line. Higher lines get better rates. These are the rates today in Pittsburgh according to their website, and may vary in other areas.
Do you have to shop banks? Is there a web site that tells me the prime,....where I bank they throw numbers at me but I don't know how to tell if they are good, bad or average.
check www.bankrate.com
Home Equity Loan Advice: Why Home Equity Rates Are Higher Than 1st ...
Mortgage refinancing can, college loan, make good sense if you want to make improvements on the house, pay those college fees, or pay-down higher-interest loans. As property prices have gone up and up, homeowners often find they have more equity than they ever dreamed of when they first bought. Richard Syron, CEO and Chairman, college loan, of the Federal Home Loan Mortgage Corporation or ‘Freddie Mac’ says “more than a dozen years of sustained growth in housing prices have turned many middle class homeowners into millionaires; put countless children through college; and made the family home the most valuable egg, college, college loan, loan, in the American nest”. Maybe we can’t all be millionaires but, even so, “for the typical family, home equity accounts for the bulk of their wealth,” agrees Frank Nothaft, chief economist at Freddie Mac. There are quite a few reasons. For a start, you’re comparing apples and oranges they’re different breeds of loan, and the interest rates reflect the different features offered by each. But how, exactly, are those interest rates set? Frank Nothaft explains, college loan, that “home equity loans are typically linked to the prime rate many home equity loans have rates that are 1 percent or more above the prime rate” and, by comparison, “most 30-year first mortgages are typically below prime”. The interest rate for a typical home equity loan needs to take several factors into account:, college loan, the risks to the lender, the duration of the loan, the flexibility offered to the borrower, and the amount of the loan in relation to the amount of equity available (referred to as the Loan to Value (LTV). The first mortgage, of whatever kind, is just that it’s the first lien on your property, and the first in line if you default on your loans. When you got your first mortgage you put your home up as collateral against the loan. If you can’t make the payments, the mortgage company, college loan, can proceed with a collection action in a worst-case,, college loan, college loan, scenario, you lose the house to pay off the loan. And, because it’s the primary loan, your first mortgage has priority in any collection action. Essentially, the mortgage company is confident that they’ll get their money back if you default. For a second mortgage, the situation’s different: whether it’s a conventional repayment mortgage or a line of credit (or any other kind of loan), it’s second in line if things go, college loan, wrong. So that’s a bit more of a risk, college, college loan, loan, to the mortgage company,, college loan, particularly if the value of your house depreciates, or you take out yet more loans. And then there’s the time factor. The term, or duration, of a home equity, college loan, loan is usually far less than that of a first mortgage. Most first mortgages are for a period of maybe 15, 20, or even 30 years. That’s because most people want to minimize their mortgage payments as much as possible, especially at the outset, and they’re in it for the long-haul. And, just think about it: while you’re making the payments, you’re paying interest, and you’re making the mortgage company money. You’re a good bet. That’s why, when it comes to first mortgages, companies compete with each other so aggressively to get your custom. And they pass that competition on to you,, college loan, through lower interest rates. A standard home equity loan is effectively a second mortgage, and can be a fixed or adjustable rate mortgage. The money is loaned in one lump sum, and payments are made over a, college loan, pre-arranged duration just like a first mortgage. But a home equity loan is typically for a short term, possibly only for a few years. Usually it’s for a specific purpose home improvements, or paying of a debt and the higher interest rate means, college loan, most people prefer to pay it off as soon as they can, rather than mount up large amounts of interest. The mortgage company doesn’t have your custom for the long-haul, and it takes this into account when setting the interest rate. Even so, this, college loan, kind of mortgage can be far cheaper than the, college loan, interest rates on credit, college loan, cards or unsecured loans. As interest rates rise, pushed up by the Federal Reserve’s successive increases in the prime or ‘index’ rate, more and more borrowers are seeing the value of fixed-rate, college loan, home equity options, in the 10-15 year range. Although these still have higher interest rates than first mortgages, homeowners have the best of both, college loan, worlds: the comfort of knowing the rate won’t rise, and the ability to improve their quality of life by releasing the equity in their home. With the other kind of home equity loan, the line of credit, you can draw cash whenever you want, up to your limit. When you pay money back, that credit is released again for you to use, immediately. In that sense it’s an “open account”,, college loan, a bit like having a credit card, but with lower interest rates. This freedom to dip in and out of the loan can be a boon for the homeowner, who only pays interest on the amount owed, and nothing more but it is more unpredictable, and less lucrative, for the mortgage company. So you pay that bit more for the flexibility of being able to use the loan as you wish, and that comes in the form of a higher interest rate. But, given the ability to release your equity and use your wealth when and where you want, it can certainly pay to refinance. Don Taylor, of Bankrate.com, agrees,, college loan, saying, college loan, that a home equity loan, or a home equity line of credit (HELOC) can “allow you to restructure your debts or finance something that’s important to you,” and adds that both kinds of loan typically have much lower, college loan, closing costs than a, college loan, first mortgage.
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