Line Of Credit
Home Equity Loan; Learn How To Benefit From Owning Your Own Home With Access To A Home Equity Line Of Credit That Can Be Used To Start A Business, Pay Off Credit Card Debt, And More! [K] [i] [n]
Bruce R. Winans (Kindle Edition) 2011-11-11
Release date: 2011-11-11
Price:
$5.95
Answers
Can I sell a home with just a 1st mortgage, collect the equity and continue to pay on my Heloc as if it is a line of credit? or will I have to include it in my home sale (and possibly a short sale)?
The HELOC is secured by your home (read your loan documents). It likely has a due on transfer clause which means that if you transfer your ownership of the property, the loan becomes immediately due and payable. Typically that means you need to pay off the HELOC with proceeds from the sale (or you need to bring enough cash to settle it at closing).
Anyone with any sense would not buy the property with an outstanding lien for the HELOC, because if that is not paid, that lender could still foreclose (that lien would be senior to any sale or transfer you make now).
A home equity loan and a home equity line of credit both provide money from the value of your home. But each one has its pros and cons.
What is Home Equity Credit Line of Credit (HELOC), whst is the advantage and disadvantage of that?
A Home Equity Line of Credit is a line of credit based on the precentage of your home you have already paid for. For Ex. you have a loan for $100,000 and you have paid 30,000 of it off and owe $70,000 still. The equity would be the $30,000 that you own. YOu could then take line of credit out on the $30,000 that you own. HELOC interest rates are based on the prime rate on Wall Street posted each month, which means that it changes monthly. Prime right now is on the rise. Recently it has been at 7.75% for the last couple of months and now it is at 8%. The prime rate is then added to what is called the Margin. Your margin is based on you FICO(credit score). The better credit you have the better margin you will have. I have even seen negative margins on some loans. So for example lets say you have a 2% margin and then prime rate is 8%. Your HELOC would then have a 10% interest rate. This is pretty high, but lower than most peoples credit card interest rate. Let's say you have 10,000 in credit card debt and the average interest rate on the collection of cards is 22%. It would be a good decision to take out a HELOC and then use that money to pay off your debt on the credit cards. You would save because of the interest rate. HELOC's have a cap rate of 18% so that would still be lower than the 22%. Unfortunately the down side of this is that the interest rate changes monthly, as well as the payment amount. There are all different kinds of HELOC/2nd mortgages you can get. Some are No Cost HELOC's and don't require you to pay closing costs, but the fine print says you cannot pay the loan off or refinance within a certain time period. Also watch out for prepayment penalties or termination fees. These usually only last for 6 months, but make sure read all the fine print! Also sometimes there is an account maintenance fee that is waived only if you never make a late payment within the first year. If you do miss a payment in the first year you end up paying a maintenance fee yearly for the life of the loan, after the first year you don't have to worry about being late except paying the late charge. You really should try a fixed rate 2nd mortgage right now instead of a HELOC since interest rates are on the rise.
Price:
$5.95
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Let's say that original home value was 200,000 and equity credit line was on 80,000. The value of the home went up to 250,000 - can the home equity line of credit be increase by 50,000?
If so how?
Would appreciate your help guys... and smile!!! )))
Not automatically.
You would probably have to apply for a new loan and have the home re-appraised.
Would a Home Equity Line of Credit or loan used to buy a home be considered a Home Aquisition Debt instead of a Home Equity Debt?
For HELO interest on principal beyond $100k to be deductible, the proceeds must be plowed back into the property pledged as security. If it's used for any other purpose, the interest on the amount of the loan over $100k is non-deductible. To be considered as acquisition debt, the property acquired must be the security for the loan.
We need to get access to $30,000, but not sure of the exact amount.
Would it be enough to have the home equity line of credit?
A home equity loan you get all the money up front. A home equity line of credit you have the money available and can use it as needed. With a loan you pay interest on the whole amount. With a line of credit you pay interest only on the amount that you have used.
Buy Cheap
Why Banks are Freezing Lines Of Credit on Houses
What would you do if your bank called to tell you that your home equity line of credit had been frozen or even cancelled? For most homeowners, shock would be the first emotion followed quickly by confusion.
Why would banks be pulling the line of credit from homeowners who have had no trouble paying off the loan. Banks have recently been pulling home equity lines of credit from all applicants, even those homeowners who never tapped the line of financial credit.
The number of homeowners who have been affected have been in the tens of thousands, as more and more banks are trying to stem mortgage losses. As banks are dealing with heavy losses from their subprime mortgages and additional high risk loans, the viable home equity loans are also taking a hit as the bank pulls the money before this equity credit line also becomes a problem.
...News
Credit crunch: Home equity lending evaporatesChicago Sun-Times - Dec 29, 2009
At the peak of the housing boom in 2006, banks made $430 billion in home equity loans and lines of credit, according to the trade publication Inside and more »Philadelphia Inquirer - Dec 28, 2009
What Harry says: It would have been easier to get a home-equity line of credit (HELOC), and it's not too late to try. You would have fewer fees and you and more »Examiner.com - Dec 29, 2009
For those of you with a Home Equity Line of Credit (HELOC) this is an opportune moment to create a strategy about how to handle it. Your HELOC's variablePR Web (press release) - Dec 30, 2009
Which in most cases is a HELOC that most lenders had language in the note stating that the HELOC note could be with or without collateral, meaning that it and more »
Wall Street Journal - Dec 22, 2009
The Business AgeConsumer delinquencies for credit cards, first mortgages and home-equity lines of credit increased again in November from the month earlier, Equifax: HELOC Origination Down 36%Home Loan Payment Trends Continue to Deteriorate: EquifaxEquifax Reports Show Consumer Delinquency Rates Continue to Rise -all 28 news articles »
Minyanville.com - Dec 30, 2009
Because of this, most lenders are no longer offering home equity lines of credit and are reducing current lines with credit-worthy homeowners. and more »Bankrate.com - Dec 25, 2009
Rates on home equity products fell sharply this week. The average home equity line of credit, or HELOC, slipped 6 basis points, to 5.54 percent, and more »