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I don't have a guarantee that the house will sell. I will spit the numbers out since you guys are not looking at buying the house. I owe 149k on the house. It is on the market for 265k....big house in very nice neighborhood. I am looking to get an equity loan of like 40k.
What's the rate on your primary/first mortgage?
Thomas Jefferson - "When the government fears the people there is liberty; when the people fear the government there is tyranny."
Also do you know that the payment on a HELOC (Home Equity Line of Credit) is typically a 10 year interest only balloon. At least at the company I worked at....here is how it would be structured. Say you borrow $40,000 then you only pay interest, no principal, on that for 10 years so its a real low payment and gets a lot of people roped in cuz it's such a low payment but after ten years you still owe $40,000. Not a good loan unless you know this ahead of time and you are paying MORE than what you are being billed but who does that these days?
Why not just drop the price $10,000 and not **** with gettign another loan?
I am not looking at a HELOC. I am looking at a equity loan. I understand how the HELOCs work and that is not what I want to do.
The tax appraised value and the appraisal done by a licensend insured appraiser are not the same thing. From my knowledge in the business is you have to get a FULL appraisal from an appraiser and it can be no older than sixty days from the date your loan closes so you can't use the "tax value" of your home....many people think this but it doesn't work that way....you'll have to get it appraised again especially if you already had it appraised and it's by an appraiser that isn't on an approved list with a certain bank. I've had people just appraise their house with a friend of the family but he isn't on my banks list so they are shit out of luck and $400 so they had to pay it again.
Correct. I have been told that a full appraisal from a certified appraiser is typically more than the tax appraised value.
5.6. The rates here are now going back up also, so I would be hard pressed to find a better rate now and with that being said it just wouldn't make sense to try.
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
I am not looking at a HELOC. I am looking at a equity loan. I understand how the HELOCs work and that is not what I want to do.
Correct. I have been told that a full appraisal from a certified appraiser is typically more than the tax appraised value.
5.6. The rates here are now going back up also, so I would be hard pressed to find a better rate now and with that being said it just wouldn't make sense to try.
An equity line against your house is a HELOC. Home Equity Line Of Credit. HELOC. Same thing.
But weigh your options (obviously) it's just a touchy subject for me since I've been in the biz and know numerous people in the biz and seen what happens when people start remortgaging their house to pay bills.
And the appraised value is 99% of the time LESS than the taxed value of your home. The cost is what I was referencign. You have to remember the tax values are usually old and outdated and done by a drive by appraisal by the city or gov't official. The appraiser that comes into your home when you sell it or refinance it will be the final say so and with the economy diving and home values falling a lot of peoples homes on average have lost 15-20% over the last year.
Thomas Jefferson - "When the government fears the people there is liberty; when the people fear the government there is tyranny."
An equity line against your house is a HELOC. Home Equity Line Of Credit. HELOC. Same thing.
But weigh your options (obviously) it's just a touchy subject for me since I've been in the biz and know numerous people in the biz and seen what happens when people start remortgaging their house to pay bills.
And the appraised value is 99% of the time LESS than the taxed value of your home. The cost is what I was referencign. You have to remember the tax values are usually old and outdated and done by a drive by appraisal by the city or gov't official. The appraiser that comes into your home when you sell it or refinance it will be the final say so and with the economy diving and home values falling a lot of peoples homes on average have lost 15-20% over the last year.
You can get a HELOC or Home equity line of credit which is revolving. Or you can get a home equity loan which is completely different. The HELOC you can get money any time you need it like a credit card. A home equity loan is a one time loan like any other loan. They are different things.
I agree with you on the appraisal now because of the economy. I didn't think about that. When I built the house, the tax appraisal was lower than the certified appraisal from the bank where I got my loan.
I am weighing my options right now and trying to get a plan together. I don't really see it being a bad thing as long as the person is discipline and doesn't build back the debt that the equity loan was taken out to pay off. I can actually see it being very beneficial in a situation like mine (which you would have to know to really get a good picture of what I should do.) Right now the rewards are greatly outweighing the risks.
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
Home Equity Loan- is nothing more than refinancing your home with cash on top- taxes and interest (at least in my state) are still deductable- best way to go IMHO
Having an Licensed Appraiser do your home is what the Mortgage Co will go by for your loan and down here the Tax appraisal value is ALWAYS less than the actual value of your home- I said Down Here
i would do the heloc if you selling it because your payment will be much smaller until you dump it
HELOC is actually the worst way to go in my situation. I can get just as low of a payment with the loan and that rate is not floating as it is with a HELOC
Home Equity Loan- is nothing more than refinancing your home with cash on top- taxes and interest (at least in my state) are still deductable- best way to go IMHO
Having an Licensed Appraiser do your home is what the Mortgage Co will go by for your loan and down here the Tax appraisal value is ALWAYS less than the actual value of your home- I said Down Here
It's actually much different than a refinance with cash on top. In a refinance, I would get the cash out and have the one mortgage. The equity loan will make a total of 2 loans, leaving equity still in the house, keeping my good rate, and not paying the thousands in closing costs. Totally different. It is the best way to go.
Also, for the equity loan they said that the tax appraisal will be fine for the loan since it will be less than 50k....I met with him today and talked over MANY scenarios dealing with my situation. He actually said that this is a smart move to my over all goal of getting out of debt the quickest way possible. I told him my plan using this money and he agreed that it was good. He told me things that he wouldn't do (refinancing was the first thing he said to not do because the rates are going back up now.) He also said that the HELOC was not the choice for me. I already knew these two things before going into the meeting.
He basically said that people really look down on these loans because so many people are not disciplined enough to use them the correct way. They basically get the loan, pay off the original debt, get the false impression that they are debt free, and then rack up the original debt again on top of the equity loan. Essentially they have doubled their debt by trying to get out and that is what gives the wrong impressions on these loans.
He also said that everyone expresses concerns about losing their jobs and in turn losing their houses. He said that having loans on cars, bikes, money on credit cards, etc...can lead to the same thing. If you don't pay your payments and have to let a vehicle go back, etc...that company actually has the rights to sue you for not fulfilling your contract and they can get their hands on all of your assets if they want...including your house. He says that their is really no more risk than you already have anyway...assuming that you use the loan correctly.
Anyway, I am still weighing everything out but it sounded like a very good way to get where I want to be.
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
HELOC is actually the worst way to go in my situation. I can get just as low of a payment with the loan and that rate is not floating as it is with a HELOC
It's actually much different than a refinance with cash on top. In a refinance, I would get the cash out and have the one mortgage. The equity loan will make a total of 2 loans, leaving equity still in the house, keeping my good rate, and not paying the thousands in closing costs. Totally different. It is the best way to go.
Also, for the equity loan they said that the tax appraisal will be fine for the loan since it will be less than 50k....I met with him today and talked over MANY scenarios dealing with my situation. He actually said that this is a smart move to my over all goal of getting out of debt the quickest way possible. I told him my plan using this money and he agreed that it was good. He told me things that he wouldn't do (refinancing was the first thing he said to not do because the rates are going back up now.) He also said that the HELOC was not the choice for me. I already knew these two things before going into the meeting.
He basically said that people really look down on these loans because so many people are not disciplined enough to use them the correct way. They basically get the loan, pay off the original debt, get the false impression that they are debt free, and then rack up the original debt again on top of the equity loan. Essentially they have doubled their debt by trying to get out and that is what gives the wrong impressions on these loans.
He also said that everyone expresses concerns about losing their jobs and in turn losing their houses. He said that having loans on cars, bikes, money on credit cards, etc...can lead to the same thing. If you don't pay your payments and have to let a vehicle go back, etc...that company actually has the rights to sue you for not fulfilling your contract and they can get their hands on all of your assets if they want...including your house. He says that their is really no more risk than you already have anyway...assuming that you use the loan correctly.
Anyway, I am still weighing everything out but it sounded like a very good way to get where I want to be.
Much different than how we run them here- Our re-fi is an equity loan with cash out , but we roll it as one mortgage. just once you do this- it stays an equity loan until its paid off
Much different than how we run them here- Our re-fi is an equity loan with cash out , but we roll it as one mortgage. just once you do this- it stays an equity loan until its paid off
Here you can re-fi with a cash out. You end up with a new mortgage for a new amount and no equity loan because you got the cash out during the re-fi. That is usually what people do when the rates get low. They re-fi for the lower rate and get some cash out of their equity and do improvements, add pools, etc....
I mean you have equity built up in your house...that is your money. If you re-fi your mortgage and get a new mortgage, how can a company charge you for the money that is yours? I guess I am just confused on how your stuff works there. Anyway, re-fi was out of the question to begin with because there are no rates offered as low as what I already have.
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
I wouldn't ask a Podiatrist how to perform open heart surgery. It's just that some of these answers are vey amusing. They make me laugh. They're funny. Funny How?
You know, like, the way they're saying the answers.... it's funny These guys talk funny?
You know, it's just..... funny. Funny how? They make me laugh? These guys are here to amuse me? Funny how? What the **** is so funny? Tell me.... tell me what's funny.
“I don't look ahead... I keep focused on my next opponent. I am looking forward to my next opponent, I don't think past that point.”
--Manny Pacquiao
I wouldn't ask a Podiatrist how to perform open heart surgery. It's just that some of these answers are vey amusing. They make me laugh. They're funny. Funny How?
You know, like, the way they're saying the answers.... it's funny These guys talk funny?
You know, it's just..... funny. Funny how? They make me laugh? These guys are here to amuse me? Funny how? What the **** is so funny? Tell me.... tell me what's funny.
dude...you huffin dust off again?
HE WHO MAKES A BEAST OF HIMSELF, GET'S RID OF THE PAIN OF BEING A MAN!!
I wouldn't ask a Podiatrist how to perform open heart surgery. It's just that some of these answers are vey amusing. They make me laugh. They're funny. Funny How?
You know, like, the way they're saying the answers.... it's funny These guys talk funny?
You know, it's just..... funny. Funny how? They make me laugh? These guys are here to amuse me? Funny how? What the **** is so funny? Tell me.... tell me what's funny.
Judging by this statement, I'll pass on your advice
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
Ok Ok Ok.... I'll be nice, and won't critique. All I will say is, I once read an entire New England Journal of Medicine. Now, would someone let me do bypass surgery on them? Why not???
Home equity loans are not "Bad". They are not the reason we are all in this mess today. Greedy lenders and ignorant people are the reason we're all in this mess. But that's neither here nor there.
The question was asked what to do with your debt. Home equity loans are a wonderful tool for paying off higher interest debt, and making it a fixed payment and tax deductible. Even though your house is currently for sale, it is still a wonderful idea to take out a home equity loan right now to consolidate your bills. Why? Because for however long you have the home equity for, the interest is tax deductible. AND, you said home improvements. Talk to your accountant to make your home improvements tax deductible to!! Sweet!
If you sold your house, THEN decided to pay your debt off, you get a double whammy. It's not tax deductible, and you have to claim your once a lifetime exemption on the profits to avoid paying capitol gains tax.
A mortgage refi with cash out costs a lot more money. You still have to pay for a title search, addendums, points, etc.... So it would cost you about $7000 in closing costs to refi to a 5.5% rate. Or you can pay $150 to do a home equity loan at 6.49% Definitely not worth the mortgage refi if your home sells in a year or 2. Plus, since your home is already for sale, chances are a lender won't let you refi. And if they do, you will have a pre payment penalty. Still not worth it.
Equity lines of credit = a waste of money. They are based on the same principal as a credit card. You pay a daily periodic rate, most are interest only loans, and the minimum payment each month would take you more than 25 years to pay off. Yea, they're tax deductible as well, but the payment structure is not beneficial to you. treat a line of credit like you would a credit card. They're wonderful to have in case of an emergency. But pay it off as soon as you can. Most people refinance their line of credit with a fixed rate home equity loan.
Oh, and my qualifications are a B.S. in Finance from Penn State
and I'm a V.P. of a bank.
“I don't look ahead... I keep focused on my next opponent. I am looking forward to my next opponent, I don't think past that point.”
--Manny Pacquiao
Ok Ok Ok.... I'll be nice, and won't critique. All I will say is, I once read an entire New England Journal of Medicine. Now, would someone let me do bypass surgery on them? Why not???
Home equity loans are not "Bad". They are not the reason we are all in this mess today. Greedy lenders and ignorant people are the reason we're all in this mess. But that's neither here nor there.
The question was asked what to do with your debt. Home equity loans are a wonderful tool for paying off higher interest debt, and making it a fixed payment and tax deductible. Even though your house is currently for sale, it is still a wonderful idea to take out a home equity loan right now to consolidate your bills. Why? Because for however long you have the home equity for, the interest is tax deductible. AND, you said home improvements. Talk to your accountant to make your home improvements tax deductible to!! Sweet!
If you sold your house, THEN decided to pay your debt off, you get a double whammy. It's not tax deductible, and you have to claim your once a lifetime exemption on the profits to avoid paying capitol gains tax.
A mortgage refi with cash out costs a lot more money. You still have to pay for a title search, addendums, points, etc.... So it would cost you about $7000 in closing costs to refi to a 5.5% rate. Or you can pay $150 to do a home equity loan at 6.49% Definitely not worth the mortgage refi if your home sells in a year or 2. Plus, since your home is already for sale, chances are a lender won't let you refi. And if they do, you will have a pre payment penalty. Still not worth it.
Equity lines of credit = a waste of money. They are based on the same principal as a credit card. You pay a daily periodic rate, most are interest only loans, and the minimum payment each month would take you more than 25 years to pay off. Yea, they're tax deductible as well, but the payment structure is not beneficial to you. treat a line of credit like you would a credit card. They're wonderful to have in case of an emergency. But pay it off as soon as you can. Most people refinance their line of credit with a fixed rate home equity loan.
Oh, and my qualifications are a B.S. in Finance from Penn State
and I'm a V.P. of a bank.
You basically took every one of my thoughts straight from my head. This sounds almost exaclty what I was saying when I was talking to my wife about this!! I mean almost word for word! I have talked to a few people on the subject and I decided to go with it. I had note pad after note pad with figuring and no matter how I did it, the rewards GREATLY outweighed the risks. I couldn't really find a reason not to do it. Thanks for the great advice!!
"He woke up because I kept punching him in the face." --Thiago Alves
"I'm telling you, once your car's been stolen, it never runs the same again. It's like a guy sleeping with your girl. He leaves his mark all over her."- Drama (Entourage)
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