topic Re: Home Equity Loan in Mortgage Loans

Home Equity Loan

Adkins — Sun, 05 Sep 2021 06:41:24 GMT

We've wanted to get a few things done around the house and consolidate some CC debt. After looking around, we decided to apply at Discover for a home equity loan due to a lower rate history and no closing costs. The last tax bill gave a home value of $180K (although, according to a local realtor, we could easily get twice that!), and we applied for $110K, for 30 years. We both got HPs on all three CRAs and pre-approval for the amount we asked for. My husband and I are co-borrowers, but he's listed first as the main one because he's got a better credit score than me. They gave him an EQ mortgage score of 730 and a EX Fico 8 of 684 for me. We had a little difficulty with some of the paperwork since he works for a small business and doesn't get a regular pay stub. We finally got everything they asked for sent to them and got a confirmation email on 9/1 that everything was in and they'll let us know after the documents are reviewed. Unless the reviewers find some glaring discrepancies between what we listed and the paperwork we sent in, our "personal banker" was confident we'd be formally approved.

A few notes:

- The representative made note that we hadn't sought out credit in the last year and then specially asked if we planned to apply for new credit in the next 60 days.

- We have no intention to take 30 years to pay the loan off. We plan to pay $200-$500 extra each month towards principal, to cut the time and interest down. At the most it will take 15 years, to 9/10 years at the latest, based on my calculations.

Re: Home Equity Loan

tcbofade — Sun, 05 Sep 2021 11:29:29 GMT

Yay you!

I hope that the rest of it goes well for you. Please keep us updated!

Re: Home Equity Loan

kilroy8 — Sun, 05 Sep 2021 15:10:20 GMT

That's great news Adkins, hope you get a good rate.

Re: Home Equity Loan

IncrsCreditScore — Sun, 05 Sep 2021 19:33:18 GMT

Great. Know y'all are anxious to get the improvements started. Had our kitchen redone about 3 1/2 years ago and it still feels like a breath of fresh air to go in there.

Re: Home Equity Loan

Adkins — Mon, 06 Sep 2021 05:11:37 GMT

@tcbofade wrote:
Yay you!

I hope that the rest of it goes well for you. Please keep us updated!

Thanks!

Re: Home Equity Loan

Adkins — Mon, 06 Sep 2021 05:13:32 GMT

@kilroy8 wrote:
That's great news Adkins, hope you get a good rate.

Thanks! We got 4.49%, a little bit above the best they offer at 3.99%.

Re: Home Equity Loan

Adkins — Mon, 06 Sep 2021 05:15:23 GMT

@IncrsCreditScore wrote:
Great. Know y'all are anxious to get the improvements started. Had our kitchen redone about 3 1/2 years ago and it still feels like a breath of fresh air to go in there.

Unfortunately, even once it funds we are going to hold off for a bit until lumber prices come down some more. 🙄

Re: Home Equity Loan

calyx — Tue, 07 Sep 2021 15:20:32 GMT

Congrats on the success, @Adkins !

Re: Home Equity Loan

Adkins — Tue, 07 Sep 2021 19:03:02 GMT

@calyx wrote:
Congrats on the success, @Adkins !

Thanks!! 😃

Re: Home Equity Loan

Adkins — Sun, 19 Sep 2021 00:49:02 GMT

And things are held up because of the DH's job. Since his boss doesn't list year to date pay and deduction totals on the DHs' checks, we are having to wait for his boss to send in work verification paperwork. (We did get the numbers sent in but his boss hand wrote part of the information and Discover wouldn't take it. 🤦🤦).

Re: Home Equity Loan

Adkins — Fri, 24 Sep 2021 07:14:31 GMT

The DHs' boss actually got the paperwork in and we've moved onto the processing phase. They're requesting a few more pieces of information though. One of which I've got to get from someone else, my favorite! (Not!) Tiny steps forward, it seems.

Re: Home Equity Loan

ecrad17 — Sat, 25 Sep 2021 03:20:52 GMT

Did they do an appraisal or did they take the value from their assessment?

Re: Home Equity Loan

Adkins — Tue, 28 Sep 2021 13:22:40 GMT

@ecrad17 wrote:
Did they do an appraisal or did they take the value from their assessment?

They used the initial taxed value but are going to get it appraised, @ecrad17. I'm waiting for a call to schedule the appraisal.

Re: Home Equity Loan

Adkins — Tue, 02 Nov 2021 13:13:52 GMT

And we are still waiting on the appraisal. Supposedly my appraisal been taken up and then cancelled twice by third party vendors. I'm very unhappy right, since I wanted to be finished with this by now. 🤦🤦

Re: Home Equity Loan

raisemysc0re — Tue, 02 Nov 2021 17:55:29 GMT

Since you say you will be waiting until well after the loan funds... Have you thought about getting a HELOC (Home Equity Line of Credit) instead?

I ask because you will be getting charged interest on the total loan from the day it funds. So, say that ends up being 6 months to a year... On an ammoritized mortgage that could be a lot of wasted money. With a HELOC you could get the line of credit and take the money out as needed and only get charged interest when you are actually utilizing the money.

I just closed on a HELOC from PenFed at 3.75% with no closing costs. They too were definitely lower in value then my homes true value but I didn't want to pay extra for an appraisal to up it since I don't actually have any need for the money (Just in case fund)...

Re: Home Equity Loan

Adkins — Wed, 08 Dec 2021 02:52:09 GMT

@raisemysc0re wrote:
Since you say you will be waiting until well after the loan funds... Have you thought about getting a HELOC (Home Equity Line of Credit) instead?
I ask because you will be getting charged interest on the total loan from the day it funds. So, say that ends up being 6 months to a year... On an ammoritized mortgage that could be a lot of wasted money. With a HELOC you could get the line of credit and take the money out as needed and only get charged interest when you are actually utilizing the money.
I just closed on a HELOC from PenFed at 3.75% with no closing costs. They too were definitely lower in value then my homes true value but I didn't want to pay extra for an appraisal to up it since I don't actually have any need for the money (Just in case fund)...

Applying for anything else at this point isn't an option. If you've read my posts, you'd read that I had a very hard time getting paystub information for my DH. Unless the next lender takes what we have, which isn't current now, there's no way I'm getting anymore information from my DHs' boss, who runs a small business and doesn't list things like taxes or paid hours, on my DHs' paystubs. And no matter who we use, we have to have an appraisal because of state law. 🤷

Re: Home Equity Loan

Adkins — Sun, 21 Nov 2021 09:03:31 GMT

Finally, we've got an appointment for the appraisal on December 1st. The appraiser wanted to come today but that's not possible with my work schedule, and next week has Thanksgiving, so that's the first date that worked. If we didn't need the appraisal we'd be done already at this point.

Re: Home Equity Loan

ridgebackpilot — Tue, 23 Nov 2021 05:54:02 GMT

Thanks for posting your story, @Adkins. Coincidentally, I'm going through exactly the same process with Discover Home Loans now.

I shopped around quite a bit before choosing to work with Discover. PenFed took weeks to return my call, and Navy Federal isn't currently offering any home equity loan products. Chase, Wells Fargo, and Bank of America either wouldn't work with us or offered unfavorable terms. Discover seemed like our best choice in a crowded market stressed by heavy demand for home equity lending.

Discover has been very thorough. My wife and I are both employed with pay stubs and documented income on tax returns, so we had an easier initial processing experience than you did. We've also owned our home for nearly 15 years and have lots of equity. At the moment, our scores are slightly lower than yours so we qualified for 5.75% on our 30-year loan.

The Discover Home Loans website makes it easy to upload the documents they've asked for. The main holdup in processing our loan has been getting Wells Fargo to verify the terms of our first mortgage. But I think we'll get there soon. Discover had no problem with the lien on our property placed by our solar energy lender. They hired a local realtor to do a drive-by appraisal. He came and took photographs of the exterior of our home. I suspect the high value of our current real estate market here on the central California coast has made appraisals largely a formality.

So far our experience with Discover has been quite positive. Between the personal banker assigned to us and the senior loan processor handling our case, we've felt well looked after. Our loan is about ready to move from processing to underwriting. Fingers crossed for both of us!

Re: Home Equity Loan

Adkins — Wed, 24 Nov 2021 02:03:42 GMT

Your welcome, @ridgebackpilot! And thanks (fingers also crossed for you!)

Re: Home Equity Loan

Adkins — Thu, 02 Dec 2021 22:04:54 GMT

The appraiser seemed happy with the condition of the home and let it slip it'd be valued $75K higher than the property tax has it listed at. According to our personal loan person, assuming everything went well with the appraisal, it'll be a few days for the paperwork to completed and then sending our file to the underwriters for the final review. Turn around time for them is about 4-5 business days to complete the review and put our file in closing status. At that point closing would reach out to us a couple of days after that. So, maybe the end of next week, or two weeks from now?