HEL/HELOC

[Creditinfo123]

What is the procedure to secure a HEL/HELOC for a new house which is 160k. Does anyone has any idea how to go about this, in addition is there any particular score needed for the HEL/HELOC thing. Thanks


[Edit by Creditinfo123 on 1056739940]

[firstsource]

A HELOC is a specialty type of home loan. The papers are the same to sign. The interest rate varies every month, they take a base rate, like the LIBOR, and add a margin to it. Would have been great for the past 6 months or so, but when you have 5 days in a row like we have had, where the 10 year bond goes up 45 points, then it might get to be very interesting.

You would just apply to a regular Mortgage Broker, or to CitiBank or to USBank directly. The rates are the same, the banks pay us a flat fee to get the paperwork done.

Depending on what LTV (percentage of the appraised value of the home, you can get one with as low as a 620 FICO score. The higher the score, the more you can borrow.

Charles

[laura66]

Try BankOne. We got one and it was painless. Interest rates start at 3.99%, $50.00 annual fee and if you close it before 2 years, there is a $250.00 fee. They ask you questions on the phone, pull an Experian report, send a courier to your house in 3 weeks with the loan docs and it is funded within 3 days. You can request a check sent to you immediately or wait another 2 weeks for the personalized checks to arrive.

[Kylie]

Can someone explain what a "HEL/HELOC" is?

[firstsource]

Sure, Home Equity Line Of Credit is just a line of credit, with a interest in your home.

You get a line of credit and a check book.

You can write checks of any amount for the first time period, when you have to pay interest only. Then have to start paying back principal and interest.

They can be fixed rates, but normally are a variable rate, based on an index, like Treasury Bonds or the COFI (I can't remember what that stands for exactly, so I am not even going to hint at what the name means) or MTA etc. Which are all changing every month. So could get "interesting" if rates went up a lot for a while.

Charles

Charles

[Creditinfo123]

So Charles, how low is too low a score to get a good HELOC/HEL, lets say I do not have 620 and I was able to get the mortgage when I was less than 620, does anyone think I stand a change of getting a HELOC/HEL at this rate. All replies are greatly appreciated.

[firstsource]

I would try USBANK and CITIBANK, I don't know what kind of CLTV (Combined Loan To Value, total of your first and this loan) you need, and don't know if the 620 Middle Score you have is a mortgage lenders score, and finally, USBANK is odd in that they just use the predominate bureau in your zipcode area for their score.

HELOC's and all types of 2nd position mortgage's require a higher credit score than firsts, because they are much more risky than firsts. WHY? Because if you don't pay the second, that lender has to at some point push for a FC. If the house is sold for less than the amount owed to the first lender plus the second lender, the guy in second position looses out, so they REALLY don't want to take on risky borrowers.

Charles

[sisflomi]

Good info guys, I wonder if theres a bank that uses just one CRA for an actual mortgage?

[kb9tbq]

Yes, there are some - well Credit Unions here my way I know for a fact do, they are small ones not up to date with the bigger banks.

I don't know how they are going along fine with just one bureau - think it has more to do with them, just not realizing what they are missing.