School Me On HELOCS Please!

Anonymous · ‎12-30-2017

Hey All,

Totally new to the idea of HELOC. Currently my wife and I are mulling over the idea sometime in 2018 to maybe do a HELOC to take advantage of our built up equity. With the money we would do maybe a pool for around $40k. Pool financing seems crazy pants like upwards 10% APR with A paper credit. Besides a pool, i'd be intreseted in keeping the HELOC open for " just in case ".

Our home we purchased in 2012 and its done nothing but gone up. One hold like mine just a block from me sold early in Oct 2017 for $514k, we bought for $313k. Thye did not have much done to their home basically dirt backyards and such. I am in the middle of finishing corwn molding, putting down bark outside in the flower beds and redoing my garden. Once done I would imagine we'd be looking pretty darn good. Our mortgage has no PMI, 30 year fixed and is a 4.25%.

Question i've got is do we do a HELOC and if so how far do i try to take it like 80-85% LTV or? Our credit is decent we have some stuff to pay off before doing this.

Never dealt with HELOCs before not sure if they are hard to get..

Thanks folks!

Anonymous · ‎01-01-2018

I got mine through Chase. Is was pretty straight forward and painless. Did it for 50k (which kept us at around 65-70% LTV). Had no problems getting approved with middle fico at 704. 10 yr draw period then it rolls to a 10 year fixed. It is attached to my chase accounts and easy to transfer money back and forth online or with the phone app

Revelate · ‎01-04-2018

HELOC's all come down to credit score and appraisal amount... with a nod to income when it comes to underwriting.

That's pretty much it for all that you have to do a bunch of paperwork in some cases. HELOC's aren't hard to get, I picked up my 80% LTV one from DCU and it's been absolutely stellar for my needs (and interest rate wise too, and my credit very average at the time at 693 EQ FICO 5 score).

80 vs 85 vs 90% doesn't really matter that much, that's just a function of what the lender will offer and how much you need and what you can repay at full utilization. Most will be 80, some will be 90, I haven't personally seen an 85% one but a key point to understand is unlike the mortgage space, HELOC's are basically the Wild West in comparison for underwriting... every lender is different, so research a few and go with one you like that can get you the amount you need.

Anonymous · ‎01-08-2018

Thansk for the great advice and insight. I am doing a bit of research at the moment on these. My wife and I might actually decide to wait on the HELOC until 2019 and in the interm knock out two 2018 goals a truck and travel trailer.