Heloc recommendations

rabb11d

rabb11d

Well-Known Member
Joined
Nov 14, 2009
Location
Statesville,NC
Anyone have a place they would recommend for getting home equity line of credit?

I'm closing on a refinance Monday and want to get a heloc after. It will not be with the institution, they were very slow.

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I don't have a need for the money currently. Just want to have access to it when needed.

Goal is to start doing some stuff with real-estate and want to have liquid funds for short term needs.

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How come you didn’t do a cash out refi? That’s what I just did. 2.75%, lowered my payment, still well below what my house is worth due to equity in it.
And they don’t need a reason for you to pull cash out, just goes in my bank account and I can do whatever I want with it (also read as remodel my kitchen)
 
77GreenMachine said:
How come you didn’t do a cash out refi? That’s what I just did. 2.75%, lowered my payment, still well below what my house is worth due to equity in it.
And they don’t need a reason for you to pull cash out, just goes in my bank account and I can do whatever I want with it (also read as remodel my kitchen)
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Because then you are immediately paying intest on all of that cash, for the life of the loan.

Getting a HELOC means that some money is available when you need it. You're not going to pay anything unti lyou withdraw, and you stop paying interest when it is repaid.
 
RatLabGuy said:
Because then you are immediately paying intest on all of that cash, for the life of the loan.

Getting a HELOC means that some money is available when you need it. You're not going to pay anything unti lyou withdraw, and you stop paying interest when it is repaid.
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This plus you will pay a penalty for a cash out refi vs a straight refi of 1/8 to 1/4 point on the entire balance.

Now a heloc will be at a higher rate than the COR would be but that higher rate will only be on the extra amount.

there are even some real creative folks out there who get a heloc and a check book and play some crazy point games with credit cards and if you stage them right you can never pay interest and make pennies a year
 
Ron said:
This plus you will pay a penalty for a cash out refi vs a straight refi of 1/8 to 1/4 point on the entire balance.

Now a heloc will be at a higher rate than the COR would be but that higher rate will only be on the extra amount.

there are even some real creative folks out there who get a heloc and a check book and play some crazy point games with credit cards and if you stage them right you can never pay interest and make pennies a year
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I see you talked to the contractor who built my house...

He kept talking about paying it off in 5 years, and "its not magic, it's math" but I finally had to point out that the only way to pay off any balance in 5 years, regardless of interest, you had to have that much money available and dedicated to it. So sure, you can pay off a $500k mortgage in 5 years at a very low interest rate, but you still have to pay, at a minimum, $100k per year. Still don't think it ever clicked to him :laughing:
 
RatLabGuy said:
Because then you are immediately paying intest on all of that cash, for the life of the loan.

Getting a HELOC means that some money is available when you need it. You're not going to pay anything unti lyou withdraw, and you stop paying interest when it is repaid.
Click to expand...

Ahhhh I see.
 
jeepinmatt said:
I see you talked to the contractor who built my house...

He kept talking about paying it off in 5 years, and "its not magic, it's math" but I finally had to point out that the only way to pay off any balance in 5 years, regardless of interest, you had to have that much money available and dedicated to it. So sure, you can pay off a $500k mortgage in 5 years at a very low interest rate, but you still have to pay, at a minimum, $100k per year. Still don't think it ever clicked to him :laughing:
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Not exactly what I mean. I've never really dove into it....but the points guys have talked about it. Something about getting some premier platinum card that has like a $500/yr annual fee but allows free balance transfers and pays points.

Then you max out the heloc, pay it off the next month with the CC...staged so interests never hit. Then you pay the CC off with the heloc check , again in Grace period....rinse repeat no monthly. You float interest free and prevent interest on the balance and get points....

I'm leaving out a couple steps and as I understand if everything works perfect you make 1k a year or so but screw up one date and you lose
 
Ron said:
Not exactly what I mean. I've never really dove into it....but the points guys have talked about it. Something about getting some premier platinum card that has like a $500/yr annual fee but allows free balance transfers and pays points.

Then you max out the heloc, pay it off the next month with the CC...staged so interests never hit. Then you pay the CC off with the heloc check , again in Grace period....rinse repeat no monthly. You float interest free and prevent interest on the balance and get points....

I'm leaving out a couple steps and as I understand if everything works perfect you make 1k a year or so but screw up one date and you lose
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Same system. And you also switch the heloc around to get the intro rates and freebies. And play foolish cash flow and delayed payment games.
 
As long as we're meandering all around this topic,

Any thoughts on HELOC vs auto loan for a used car?
late summer/ fall we plan to get Wifey a 3-4 y/o vehicle. Will probably pay 1/3 cash up front, finance rest over 18-24 months.
At our credit unin the rates are not terribly different, HELOC a little higher but on this kind of sum its almost inconsequential.
I'm thinking a HELOC has the advantage of being an easy title transaction
 
I used BB&T for a HELOC and it works as advertised. They were a little stingy with the max line considering my debt to equity ratio and great credit score but, like their mortgages, they service the loan so they are more cautious with the money. I also have a mortgage with them.
 
RatLabGuy said:
As long as we're meandering all around this topic,

Any thoughts on HELOC vs auto loan for a used car?
late summer/ fall we plan to get Wifey a 3-4 y/o vehicle. Will probably pay 1/3 cash up front, finance rest over 18-24 months.
At our credit unin the rates are not terribly different, HELOC a little higher but on this kind of sum its almost inconsequential.
I'm thinking a HELOC has the advantage of being an easy title transaction
Click to expand...
I like this idea and will use it almost exactly the same way when the time comes. The one advantage with the HELOC is that the required payment each month is only on the interest so if you need to adjust your monthly budget for an unexpected expenses once in a while you are not trying to figure out where the rest of the payment is coming from to cover the principal. Then, later if you have some free cash you can throw it at the balance and that makes the interest payment decrease (provided you do not add to the principal balance.). It is a pretty good "self financing" instrument, especially right now with interest rates being so low.
 
Dave I wouldnt for three distinct reasons:
1) Through my local credit union I can get 1.9% on auto loans...I cant get that good on a HELOC.
2) Most dealers have stupid incentive games to finance with them, you will likely pay more if you finance third party..unless you just like the negotiation and trick game.
3) This is the big one...I always plan for the absurd. If the worst case scenario happens. You could end up forclosed and evicted from your house for not paying your car payment. We never plan to be there but sometimes shit happens. With a stand alone auto payment if shit happens worst case sceanroio they repo your car. In a HELOC it is a foreclosable position....I know I know "Wont happen to me" Id just refi it" etc. What if you lose your job and have a major injury/illness in a short time span, cant get employed and therefor cant qualify for a new loan. We can what if it to death...but for me...I wouldnt do it. You are free to do as you see fit.
 
RatLabGuy said:
Because then you are immediately paying intest on all of that cash, for the life of the loan.
Click to expand...

The total interest on a 30yr is going to be close to 50%... So it costs $10k to cash out $20k, plus you take a hit on the rate.
 
Ron said:
Dave I wouldnt for three distinct reasons:
1) Through my local credit union I can get 1.9% on auto loans...I cant get that good on a HELOC.
2) Most dealers have stupid incentive games to finance with them, you will likely pay more if you finance third party..unless you just like the negotiation and trick game.
3) This is the big one...I always plan for the absurd. If the worst case scenario happens. You could end up forclosed and evicted from your house for not paying your car payment. We never plan to be there but sometimes shit happens. With a stand alone auto payment if shit happens worst case sceanroio they repo your car. In a HELOC it is a foreclosable position....I know I know "Wont happen to me" Id just refi it" etc. What if you lose your job and have a major injury/illness in a short time span, cant get employed and therefor cant qualify for a new loan. We can what if it to death...but for me...I wouldnt do it. You are free to do as you see fit.
Click to expand...

While all of that is true there is one advantage with the HELOC; like I said above you only have to pay the interest on the loan each month so if you are short you are not coughing up the principal as well. A true car loan is a bigger payment. Clearly they are not planning to pay on it for long (he said 18-24 months) so the impact of interest rates are not as large. In addition you will actually hold the title since the HELOC money is treated like cash.
 
Ron said:
Dave I wouldnt for three distinct reasons:
1) Through my local credit union I can get 1.9% on auto loans...I cant get that good on a HELOC.
2) Most dealers have stupid incentive games to finance with them, you will likely pay more if you finance third party..unless you just like the negotiation and trick game.
3) This is the big one...I always plan for the absurd. If the worst case scenario happens. You could end up forclosed and evicted from your house for not paying your car payment. We never plan to be there but sometimes shit happens. With a stand alone auto payment if shit happens worst case sceanroio they repo your car. In a HELOC it is a foreclosable position....I know I know "Wont happen to me" Id just refi it" etc. What if you lose your job and have a major injury/illness in a short time span, cant get employed and therefor cant qualify for a new loan. We can what if it to death...but for me...I wouldnt do it. You are free to do as you see fit.
Click to expand...
Valid points - but isn't #2 only the case w/ new cars?
We'd definitely be going used.
 
Ron said:
Through my local credit union I can get 1.9% on auto loans...I cant get that good on a HELOC.
Click to expand...
Is that still accurate? I know a year or two ago that was possible, but everything I've seen had gone up 1-2%. Truliant used to be sub 2% on new stuff, and now they are 3.24%, and higher as it gets older.
 
Also, HELOC interest used to be tax deductible. Not sure if it still is.
 
I usually check my car rates against allegacy federal credit union. They typically have some of the best.

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OnlyOneDR said:
While all of that is true there is one advantage with the HELOC; like I said above you only have to pay the interest on the loan each month so if you are short you are not coughing up the principal as well. A true car loan is a bigger payment. Clearly they are not planning to pay on it for long (he said 18-24 months) so the impact of interest rates are not as large. In addition you will actually hold the title since the HELOC money is treated like cash.
Click to expand...
jeepinmatt said:
Is that still accurate? I know a year or two ago that was possible, but everything I've seen had gone up 1-2%. Truliant used to be sub 2% on new stuff, and now they are 3.24%, and higher as it gets older.
Click to expand...

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