Looking into getting HELOC to do some improvements on our home. I started with the obvious places like our bank, who we have mortgage with but any others people would recommend getting estimates from?
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In addition, any member’s experiences with HELOC? + Do’s & Don’ts…
Don’t get a HELOC if you are trying to approve for a mortgage.
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I had a heloc with BOA and it had been great. Shoot a private message to @LbJW and he should be able to help you.
Make sure the total heloc plus mortgage is less than 750k, as that is the max you can deduct (assuming you are remodeling your primary).
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How much is equity? Mainly LTV ratio.
Assume you bought 800k home, loan of 600k (first mortgage) and the current appraisal is 1M. Lenders will give you 85% LTV = 850k (both 1st and 2nd=HELOC), you can max get 250k by this method.
Normally, Credit Unions are best to get HELOCs as they are low rates, Say TechCu or Star Credit or any other local credit unions. But they are limited to 100k or 125k even if you are eligible to 250k.
Big banks like BOFA, WFC and many other banks may go up to 250k or 500k, but the rate is little higher side.
Almost all banks are giving HELOCs for primary home, rarely some banks give HELOC to investment property.
HELOCs are normally Prime_rate + 0.10% or 0.25% or 1% or 2%. Choose the lowest Prime_rate+%.
My preference is always to get HELOCs, but do not use it unless emergency as the rate may vary when prime rate changes.
Also note harriet has valid point “Don’t get a HELOC if you are trying to approve for a mortgage”.
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How about cashout refi? That is different from heloc, isnt it?
HELOC is credit line. When you withdraw, you pay interest to the amount you withdraw.
Cash our refi is full mortgage, they give you money, interest starts on the first day onwards whether you use it or not. Second, cash refi is always higher interest rate (0.25% to 0.5%) than non-cash out.
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So depending on original mortgage rate, might not be a good idea. Got it.
Thanks for the info, so far just gotten estimates from our banks WF and BoA and BoA seems like a better deal but I’ll keep shopping around.
BofA has good rate but it’s a nightmare to work with them. Tons of paperwork.
Credit unions are more pleasant to work with.
If you need a line more than $500k, US Bank has reasonable rates.
Most of these banks have programs that if you keep certain amount of assets with them, you can get a discount on the rate. For me I parked my company ESPP shares with US Bank (I need to put it somewhere anyway) and received a pretty good discount.
But I would prefer a 30-yr cash-out refi over HELOC unless the rate difference is big. You can always refi 6 months after the cash-out refi to bring the rate down if rate hasn’t changed.
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I have heard good things about the SF Fire credit union heloc. They go up to 80% LTV at prime rate, and 90% ltv at prime rate plus 1%.
Thanks @Lulu but I don’t qualify for them since I don’t live or work in SF, SM or Marin county apparently. I did get a quote from pedfed CU and they had comparable rates as SF Fire - they are a 15 year repayment period vs WF or BoA were 20 so the monthly payment was higher. debating if we go HELOC and try to pay it off relatively quickly (within a few years) versus doing a cash out Refi or something and trying to get a 15 or 20 year mortgage vs the 30 we have…super overwhelmed with all the choices.
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Anyone used this CU??
2.99% for 18 months seems super attractive for funding flips/short term needs. 100% LTV too.
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Looks to be a good deal
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I bet that you won’t get 2.99% at 100% LTV. Most likely false ads by innocent but inaccurate statements.
But even 2.99% at 75% LTV is very attractive
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