Revolving vs installment

[haulingthescoreup]

With a CL of $125K, I think you're good!

Lel, if you can find that article again, could you please post a link to it? Partly because it's a rule around here that we have to cite sources, but I'd also like to read the whole thing. Thanks!


One comment: I'm glad that Mr. Watts thinks that having a $28,500 balance on a $30,000 HELOC reporting as if it were a CC wouldn't have much effect on util! Frankly, I think that's nuts.

[Lel]

Well, I still have to get approved. My scores are fine - upper 700s - but the big question is whether the house will clear B of A's "desktop appraisal" (I think that's what they call it) in order to get the line that I would like.

The link to that article is:

http://biz.yahoo.com/brn/080424/24968.html?.v=1

[haulingthescoreup]

Thanks for the link, and good luck on the HELOC! I love mine --we're doing home remodeling, and I also treat it as another form of financial insurance.

Reposting the URL as an active link:

http://biz.yahoo.com/brn/080424/24968.html?.v=1

[Lel]

Bah....I just heard that B of A changed the rules for their HELOCs. Now they are only allowing HELOCs with a combined loan-to-value of less than 85%. This is down from 90% just a couple weeks ago, and down from 110% last year. As a consequence, even if my home appraises out for the amount that I think it's worth, it will only qualify me for an $85,000 HELOC, which is not enough to cover the balance of my second loan. My only hope is that the house will actually appraise higher, which is possible but not likely given the current state of the housing market in California.

Oh well. I guess all my time fretting about this and scouring these boards and the internet has proven to be my undoing. Fortunately, I can still comfortably afford the current payments on my home equity loan, but it would have been nice to drop that payment by a few hundred bucks. ***sigh***

[RobertEG]

I would only offer the comment that whether your new HELOC is treated, after you secure it, as install or revolv in FICO scoring, makes no diff in securing the HELOC.  If you are not seeking additional new credit in the near future, then any future FICO iscoring implications are not a major basis for making a current major financial decision.

[Lel]

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@RobertEG wrote:

I would only offer the comment that whether your new HELOC is treated, after you secure it, as install or revolv in FICO scoring, makes no diff in securing the HELOC. If you are not seeking additional new credit in the near future, then any future FICO iscoring implications are not a major basis for making a current major financial decision.

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Your point is well-taken; however, I am actually interested in making a major mortgage move this summer. My first mortgage is a jumbo ARM, and with the new (but temporary) conforming limits, I would like to try to refinance my ARM into a fixed rate. With the way that banks are tightening their lending criteria, I wanted to be really careful about any moves beforehand.

Anyways, thanks to ShaneTheMortgageMan, I have secured preapproval for a HELOC with US Bank. I'm going to give B of A a chance to see if their appraisal hits the number needed to go with them, but I'm glad to have a backup plan. There's an annual fee and a early prepayment penalty with US Bank, but I will more than make it up in interest savings.