Should I Get A Home Equity Line?

Comments(10)

• 
  stlouis331st September, 2004

  You want to get your Equity loan BEFORE you quit your job as you will need to prove income unless you go on a stated income program which will lower your max CLTV.
  
  A HELOC starts with a teaser rate of 3.99% for the first 6 months then is tied to the prime rate of the market at that time. This is on a 10 year interest only loan with a 10 year draw. A good way to cushion your bank account until your REI business takes off.
  
  You do not have to take the full draw when you close. You can take zero out and down the road make a withdrawal. It is very similiar to having a Visa card that you can cash advance on. Let me know if you need further help.
  
  Jennifer

• 
  pj94z1st September, 2004

  Thanks - that is exactly the reason I want to get this HELOC done quick - so I can quit ASAP.
  
  I don't need any of the $ right now, but I want to have the line open incase I run into emergencies in the next year where I may need to tap the line for some cash $
  
  What are the rates?
  
  Any Good Bank to go with?
  
  Are there high closing costs?
  
  
  Quote:
  On 2004-09-01 13:29, pj94z wrote:
  I have a rental property as follows:
  
  2 yrs old, SFH, bought for 100k in Feb. 2004.
  
  Monthly PITI: $772
  Rent Income: $1,000 (Sec. 8 Tenant)
  
  Current Value: $140,000
  Mortgage Bal : $ 98,000
  
  Equity: approx $40,000
  
  
  I will be quitting my full time Job to go into REI full time - I want to quit this Friday.
  
  Should I go ahead and get a line of credit on the house? Incase I need emergency funds in the near future?
  
  Should I get the Home Equity Line of Credit before I leave my JOB ?
  
  How long would this process take? (I would like to quit ASAP)
  
  
  Any advice on getting a home equity loan or how it works? (I'm not clear on how exactly it works)
  
  thanks

• 
  edmeyer1st September, 2004

  Another issue is that you may not be able to get very much out of a non-owner occupied HELOC. Someone out there will likely know what is achievable, but I believe it will be less than 80% of FMV. At 80% you are looking at a $12K line of credit with the numbers. At 70% your line of credit is zero.

• 
  pj94z1st September, 2004

  Good point edmeyer.
  
  Even $12,000 would be better than nothing - most probably, I will never NEED to use it, but nice to have around.
  
  However, if closing costs will be $2,000 or more, than It would not be worth it since I probably won't use my HELOC anyway.
  
  Anyone know what kind of Fees/costs I'm looking at ?

• 
  NHRalph1st September, 2004

  If all you have is one rental I would wait before quitting my job.
  I use the equity on one piece to buy another and do it over again.
  You can get a good line of credit and not use it but once you decide to quit, your going to have a harder time getting loans from a bank.
  I also notice you have section 8's. I have had them also and I would only place them in an in-expensive house right now or a mobile. I've never had one leave with out a lot of work later.
  Good luck and get more experience.

• 
  ciroma1st September, 2004

  Hi,
  
  I also intend to use my Heloc to purchase one home after another but my questions is, If I buy
  
  Home A at $40K, and FMV is 40K Is max i can take out 32K at 80% when I refinance.
  
  This means to buy Home B, if it cost 40K. I will need to come up with 8K + 32K.
  
  Is they a better way of doing this. Or the scenerio above is pretty much how it works.
  
  I will aslso sugest you don't quit your job now. until you can replace your monthly expenses with your real estate investments cashflow.
  
  Thanks
  Ciroma.

• 
  renewpp7th September, 2004

  Without looking too far you currently should be able to find a HELOC with$0 in fees. I just closed mine in 2 weeks with Bank of America, cost me absolutely nothing. Everyone's situation is different(credit rating, bank relationship...). Mine was on my current residence and was able to go 95%. 80% on non-occupied is miost likely true, will have to inquire on this with Mr. Banker...

• 
  webuyproperties7th September, 2004

  Get the HE Line on your primary residence BEFORE you leave your current employment. While there are stated income lines out there, they are challenging to get through...
  US Bank has a HE line at 80% LTV @ prime, 90% LTV at prime +1 and 100% prime +2...
  good luck

• 
  bluecat137th September, 2004

  RE: HELOCs. In your experience, how long has it taken to get one... say from the time you request one until it was approved.
  
  Quote:
  On 2004-09-07 22:59, webuyproperties wrote:
  Get the HE Line on your primary residence BEFORE you leave your current employment. While there are stated income lines out there, they are challenging to get through...
  US Bank has a HE line at 80% LTV @ prime, 90% LTV at prime +1 and 100% prime +2...
  good luck

• 
  pj94z8th September, 2004

  I closed on the HELOC yesterday !
  90% LTV, no fees/closings costs.
  My rate was 4.25% (prime + .5%)
  
  I applied for the HELOC on Thursday at 6 pm.
  
  Friday morning, I was told closing was to take place Tuesday - would have taken place Monday but that was a holiday.
  
  Wow, I couldn't believe how fast n easy this was.
  
  
  SUNTRUST Bank is the way to go!