Answers
We have plenty of equity in our home and my sons college tuition will be approx. $30000/year. Should I take out a home equity for the estimated 4 year costs, or take out a home equity line of credit and hope interest rates stay low?
Loan....never line of credit.....The apr will change on a line of credit.
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.
I have a home equity line of credit at 9%; I see them advertised at 7.5%. Any ideas on how I might find a better rate without closing costs besides just calling around?
Try Citimortgage, I wouldn't do the line of credit, I would do the home equity LOAN, because the line of credit adjusts with prime. Do the loan and it will be fixed. It also depends on your home's worth and how much you need and your credit score. There are a lot of factors. Call a mortgage BROKER because they can shop around for you and get you the best rate. Also the closing costs are typically covered with Citimortgage.
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 am buying a home. The mortgage broker tells me I can get a HELOC with zero closing costs in addition to the mortgage. I don't need it currently, but is it useful to get it for the future in case I need money? I am financially stable and have very good credit.
It probably would not be a bad idea to obtain. You will want to ask though what is the early cancellation fee, what is the interest rate and what is the what is the annual fee. Most of these come with the annual fee waived for the first year and a discounted initial interest rate. Make sure you ask about these as well. Also, read the final paperwork on the closing paperwork for the HELOC to make sure it is consistent with what he is telling you.
HELOC's are very nice to have, even if you are in great financial shape currently. The mortgage interest on them is generally all tax deductible and they can provide for a great way to purchase needed items at a lower rate than using a credit card generally. You only pay on what you use and if you never use it you don't pay on it. It seems to work out that when people have the equity in their home and their financial situation is going well that they don't need the HELOC, but if things go bad and you need a HELOC you might not be able to get one because you are either over extended, your credit scores dropped or something similar. Therefore, it is a nice item to have and that way you have instant access to the equity in your home should you need it.
I called to check on the status of my application and hear it is "temporarily approved pending two confirmations." These include making sure my house is not in a flood zone, and the value of the house. In order to do this, the application has to be assigned to someone, and that has not been done in over a week.
Since I am requesting under $500,000, the bank absorbs the costs associated with the confirmation of the value of the house.
How long does it normally take? I assume they checked my credit score already, the purpose is to consolidate debts and I am in the red. Could they reject the application on the basis of poor credit now?
call them. they could be waiting for an appraisal, there could be a snag or two on the credit report. being is debt is usually ok its if you are behind that matters. and yes if they just pulled the credit, it can still get rejected. the process usually takes a few weeks so relax
home equity loan: Cashing In Home Equity
If you need more money for improvements to your house for college funds or other charges, payment Home equity is an attractive option. In general, you will get a better interest rate than if you took out a bank loan for such expenses, and often you can part of the home equity cash without increasing monthly costs.
There are a number of ways to make money in stocks at home, each with its positive and negative:
Home Equity Conversion Mortgages:
For those who are older than 62, a Home Equity Conversion Mortgage (HECM) is the best way for the redemption in home equity. Home Equity Conversion Mortgages are commonly called "reverse mortgage" because the amount of equity in the home increases and not increase the length of the mortgage.
...News
Credit crunch: Home equity lending evaporatesChicago Sun-Times - Dec 29, 2009
He planned to pay for the project with his $200000 home equity line of credit, which he took out in January 2007 when his house was valued at $750000. 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 »
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 »Wall Street Journal - Dec 29, 2009
"The banks have really tightened up, so it's harder and harder to get a home-equity line of credit," Mr. Richardson says. "If you don't budget for repairs, 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%Equifax Data Show U.S. Consumer Payment Trends Continue to Deteriorateall 28 news articles »