Variable Line Of Credit

Have you already "tapped" into your line of credit? If so, then you will have to check w/the lender to see what you can do. Maybe you could take out a 2nd line of credit, pay off the existing 1st LOC.

If you haven't, you might want to meet with your lender to see about getting terms that are more favorable to you.

Maybe one of the mortgage brokers who post here can give you a better answer. I think your best answer will come from your lender.

Good luck.

2009-02-16 05:13:17 by JJ

in Canada. Will go through a $240k Mortgage as a 5 year fixed, variable, line of credit and a variable mortgage with a principal kick back. At the ...

my current line of credit is at 7.5%. I can switch it from fixed to variable to 6.05%. Will fed keep rates low or will they go up again? I can't switch accounts for another 5 months to avoid prepayment fee $500. I would like to lock in at lower rate. I am at 90% of value. Question is will rates remain low on variable loan?

I must disagree with everyone... I originate Home Equities and I recommand variable to my clients. Fed just lowered the rates and the plan is to make the economy go faster. I believe the rates will remain low for another year at least If they go up they will go by only .25% or .50% and then that's the time you can choose to fix your home equity. You want to pay over 1% higher in interest for the fear of rate going up by .50%?

2008-02-07 10:39:48 by toddrws

I really had to get this because I had a whole load of health problems pop up unexpectedly,and then my car dying, and all sorts of things, and I really love the idea of long term/small payments, it's just so convenient. So this was a perfect choice for me, however,...the interest rate is variable, and well, it's currently very low...at around 7%, but how high can they jump?

I'm nervous!
And, do they ever go back down again?

Hi Brad:

I was around for the 1982 mess that had people turning their house keys over to the banks as the rates went up and over 20% and people couldn't make payments. Things stayed there for a relatively short time; however, it took awhile to come down again.

Now is a time to get out of debt more than ever. If you can make payments that will do that for you quicker than later. If you just don't have the cash flow ~ think about locking yourself into a long term loan at a fixed rate. Keep the overdraft privileges; yet, don't use them anymore and stay within means with your life style.

For the moment, make all deposits (pay cheques etc.) into your line of credit account fully each time you get paid. This will help in the short run.

2009-01-04 10:12:31 by nick cave

I have equity in the house. I now have a 15 year amortization and I was thinking of going 20 to keep my payments down. What do you think?
my mortgage is 4.5%, my line of credit is variable at 6% and a new mortgage for an additional 30,000 would be 4.68% on the total of 115000.

So, I assume your line of creidt is Secured by your house.

I see you wanted to lower your payment by stretching back to 20 years. Is that some kind of situtation happened? There are lots of things you can do.

What I will suggest to do is the followings:
1) Keep a secure line of credit at ( combined income / 2 ) @ 6%
2) Rest in a fixed rate mortgage.

The reason of doing that is. I have developed a system that you can save thousands of interest by setting up like above. Please call me for details.

But in general, having such a setup with allow managable line of credit. Maximized the low rate mortgage rate of a fixed term.

2006-09-26 19:04:03 by penquin

That's what I'm nervous about. My interest rate is right now at 6.5%, and because the economy is so bad that's most likely why.

However as the economy rebounds, which it eventually will, I'm sure my interest rate will jump. However that worries me because I'm not sure how much I'm then going to end up paying.

How high or low do they usually go?

I mean I just don't want to worry.

I can lock it in if i wanted to, but then my line of credit would turn into a loan, and I wouldn't have the option of taking more money out, which would honestly defeat the purpose of taking out this line of credit in the first place.

Anyways, any advice is greatly appreciated, thanks.

The adjustable rate aspect of a HELOC is a big disadvantage. And it gets worse. Unlike a typical ARM there are no adjustment or lifetime caps to limit the rate/payment fluctuation. Also your rate is calculated on a daily basis where a traditional ARM is based on a monthly calculation ( it's a small difference but something you should be aware of) take another look at your present 6.5% rate.

The tone of your question suggest that you view your HELOC as an insurance policy should you have a need for cash in the future. Which is an excellent strategy.

Now to address your real question as I see it.

You don't want to turn your HELOC into a fixed rate loan while you still have a considerable limit left to draw on.

May I offer a solution.

You can do a cash out refi on your 1st mortgage and use the additional funds to pay off your heloc balance. Of course Cap 1 would have to subordinate themselves to the new first

or
You could do a cash out refi on your 1st mortgage. Payoff and close your Cap 1 heloc and get a new one possibly with a higher limit but definitely with a better rate. 6.5% in todays market seems steep.

2009-05-12 19:54:49 by nick cave