@Anonymous wrote:
I don't understand HELOC. I can't get refinancing on our FHA because everyone is saying our loan rate is so good/ too good (3.85%). We need some cash right now and I'd like to get a HELOC. We have cash but I'd like to have a CL that I could use in an emergency. How do they work? I need one with no income verification because of self-employment. We have perfect payments on our mortgage for 2 years. New construction and should be appraising higher (but not yet 80/20 LTV) but maybe.
Odds are they will want income verification: it's basically mandatory at some level for every credit product these days, and HELOC's that's always been the case.
Are you stuck in the wierd spot being between 0 and 2 years of self-employment? If you're 2+ years, just provide 2 years tax returns and done. If you aren't, I don't think there's a great solution to this one other than waiting out the time period.
Anyway you are looking for a HELOC for the same reasons I picked mine up (though my immediate needs was financing yet another aborted school run), and yes they draw same as cash pretty much but it depends what services you get: some you have to just xfer the money where you want, others you can write checks against, others you can do an ACH against the HELOC for online payments, some even provide a Visa debit card from what little research I did prior to going with a known lender... HELOC's aren't standardized like mortgages as they don't get passed around from lender to lender typically on a secondary market. Rate, quality of life, and LTV are all going to vary.
Most HELOCs write at 80% LTV, but there are some which will do 90% so you'll want to compare a bunch of lenders most likely, but ultimately you will need to sort out the income verification. Some might even do 95% but I didn't see them personally when I was looking last year but things change.
