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Mechanics of A Heloc
Posted on 7/12/22 at 10:06 am
Posted on 7/12/22 at 10:06 am
Can someone walk me thru the mechanics of a heloc:
Appraisal
Loan up to 85% of Appraisal minus Mortgage
10 year draw period only paying interest on money drawn (?)
Repayment period after 1o year draw period (?)
Can you pay early during the draw period?
Does your LOC increase as your mortgage decrease?
TIA
Appraisal
Loan up to 85% of Appraisal minus Mortgage
10 year draw period only paying interest on money drawn (?)
Repayment period after 1o year draw period (?)
Can you pay early during the draw period?
Does your LOC increase as your mortgage decrease?
TIA
5
Posted on 7/12/22 at 10:37 am to ThatsAFactJack
quote:
Can you pay early during the draw period?
of course, its usually pay what you want but you at least pay the monthly interest generated.
quote:
Does your LOC increase as your mortgage decrease?
No, you're usually locked in at a hard ceiling when heloc issued of your line of credit value.
Posted on 7/12/22 at 12:21 pm to ThatsAFactJack
quote:
Loan up to 85% of Appraisal minus Mortgage
For example, home appraises for $100k and you owe $50k, they'll lend you $35k.
quote:You only pay interest on the amount you borrow from the line. The interest is calculated daily on the outstanding balance at that time.
10 year draw period only paying interest on money drawn (?)
quote:If you have an outstanding balance after the 10 years, they'll term it out for a period of 10 years for you to pay back, but you won't be able to borrow from the line any longer.
Repayment period after 1o year draw period (?)
quote:You can pay whenever you want an as early as you want. If you want to maximize this, Youtube "Velocity Banking"
Can you pay early during the draw period?
quote:No, it's a set amount that you're approved for and that's the maximum you can borrow during the 10yr period.
Does your LOC increase as your mortgage decrease?
This post was edited on 7/12/22 at 12:24 pm
Posted on 7/12/22 at 1:11 pm to ThatsAFactJack
quote:
Does your LOC increase as your mortgage decrease?
Depending on the value of your home and/or LTV ratio, you can sometimes go back and get your limit raised. I got that option a year or so ago, but ended up not needing to go that route, thank goodness.
ETA: The interest rate is also revolving, although MUCH MUCH lower than Credit Cards. A year ago, mine hovered around 4%, and now it's up to around 5%, so it's not huge swings, but it's definitely not fixed.
This post was edited on 7/12/22 at 1:13 pm
Posted on 8/2/22 at 3:34 pm to LSUGUMBO
Exploring HELOC, any recs on lenders in Lafayette area?
Posted on 8/3/22 at 8:30 pm to ThatsAFactJack
10 year draw, 15 y3ars to repay mine.
my house is paid off
HELOCs are phenomenal to use with velocity banking and investing
my house is paid off
HELOCs are phenomenal to use with velocity banking and investing
Posted on 8/4/22 at 9:08 am to Fat Bastard
quote:
Fat Bastard
quote:
HELOCs are phenomenal to use with velocity banking and investing
DING! DING! DING!
Posted on 8/4/22 at 12:33 pm to ThatsAFactJack
The rates are adjustable, so it seems beneficial to pay off asap.
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