Line Of Credit Equity

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.

2007-10-20 13:30:09 by moviefan2020

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.

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.

2008-05-31 01:18:06 by Evan

Price: $5.95 $5.95

I want to open a home equity line of credit. I have 100% equity in my house and an excellent credit rating. I am planning on moving, but would like to buy another house first, and then sell my current house (which would sell for a higher price than the one I would buy).

If I use the equity line to buy a house, would the bank permit me to sell my current house and pay them off at the closing? Kind of a bridge loan without the fees.

I agree with Ibu Guru, I think you are making a big mistake, do not use a loan to get another loan, payoff the first house and save to purchase another, remember that the people who are being foreclosed are those that have mortgages.

2009-02-26 08:44:20 by lamontnow

Price: $5.95 $5.95

My husband and I are currently paying PMI (Private Mortgage Insurance) on our mortgage. (We have no second mortgages.) I know we need twenty percent equity in order to eliminate PMI, but I don't think we're quite there. Is taking out a home-equity line of credit to pay down the mortage a good idea? I know that we'd then have two loans to pay, but the PMI would be eliminate and all of our payments (minus the interest) would be going toward the loan rather that insurance. Is it possible to get a home-equity line of credit for 6%?

To eliminate PMI you have to get an appraisal done to verify the your equity. An equity line of credit is a variable rate based on prime rate. I believe it is around 7-8% right now. I personally feel PMI is ok becuse HELOC's are adjustable and you would end up paying more interest over time than insurance in most cases. You should contact your bank to see how and when eliminate you can stop paying this insurance (sometimes you cannot eliminate PMI for at least two years). If you calculate your interest payments on the HELOC to be less than PMI and you can pay the balance off quicker than having the insurance for two years then it's a winner.

2006-11-01 08:01:38 by Melissa O

Does anyone know the typical point for a home equity line of credit ? By point, I mean the up-front fee that is proportional to the credit limit. So if the term asks for 5 points (5%) and the line of credit is $100,000, there is a $5,000 fee. Do you think that the numbers I've just mentioned are a pretty good deal, assuming that the interest rate is good? Thank you.

The minimum equity needed for a HELOC is 10% but it may be difficult to qualify for that and there will be fees on top of that. A typical HELOC requires you to have 25% equity/down-payment and ok credit (Your credit doesn't have to be perfect... If you applied for a credit card today, would you be approved? If yes, then your credit is good enough to qualify).

5% will only get you a typical mortgage.

2007-02-25 21:10:19 by gradjimbo