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Should I take out a My husband and I are currently
paying PMI (Private Mortgage
Insurance) on our mortgage.
(We have no second mortgages.)
I know we need twenty percent
equity in order to eliminate
PMI, but I don't think we're
quite there. Is taking out a
home-equity line of credit to
pay down the mortage a good
idea? I know that we'd then
have two loans to pay, but the
PMI would be eliminate and all
of our payments (minus the
interest) would be going
toward the loan rather that
insurance. Is it possible to
get a home-equity line of
credit for 6%?
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To eliminate PMI you have to get an appraisal done to verify the your equity. An equity line of credit is a variable rate based on prime rate. I believe it is around 7-8% right now. I personally feel PMI is ok becuse HELOC's are adjustable and you would end up paying more interest over time than insurance in most cases. You should contact your bank to see how and when eliminate you can stop paying this insurance (sometimes you cannot eliminate PMI for at least two years). If you calculate your interest payments on the HELOC to be less than PMI and you can pay the balance off quicker than having the insurance for two years then it's a winner. |
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Can you have a home equity My husband and I have two
mortgages (an 80% and a 10%).
Our banker uses the term for
the "second mortgage"
interchangeably with a "home
equity loan". Is it possible
for us to take out a home
equity line of credit at the
same time we are paying the
second mortgage?
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If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determinepercentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate. |
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Can my partner get a home My partner and I are splitting
up. We own a home together.
Can she take out a home equity
line of credit without my
signature?
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Not legally, no. But beware. I used to be a realtor and know that sometimes one spouse will lie and/or forge papers to sell a house or get a loan. |
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Home equity line of credit: Hello everyone, I need to move
to another location. Can I
take a home equity line of
credit on my existing house to
pay for the down payment of a
new home, and then sell the
first house that I used for
the line of credit? Are there
any restrictions to do that?
Can I avoid the fee that I
will get if I sell the first
house early? Thanks.
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I agree with the first answer. You will have to disclose the source of the funds on the purchase of the new home so that they can calculate the debt ratio correctly. I would add that it will be difficult to get a home equity loan if the home is listed for sale. Get the home equity loan first if at all possible. Otherwise what you are looking for is a bridge loan. Some lenders offer them only if they have the purchase loan on your new home so take care to make all of the arrangements in advance so that you don't end up in a jam. You also need to consider whether or not you will be able to get the home sold quickly for what you owe on it or be able to carry both houses while your current home is on the market. Without having your current home sold, you will have to qualify with all the payments in your debt ratio and you have no idea how many people have bought a home thinking there current home would sell only to go broke trying to carry two payments and then let the one on the market go to foreclosure. Good luck with the move and be careful. There are worse things than renting for a while where you are going. |
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What is the typical point for Does anyone know the typical
point for a home equity line
of credit ? By point, I mean
the up-front fee that is
proportional to the credit
limit. So if the term asks for
5 points (5%) and the line of
credit is $100,000, there is a
$5,000 fee. Do you think that
the numbers I've just
mentioned are a pretty good
deal, assuming that the
interest rate is good? Thank
you.
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The minimum equity needed for a HELOC is 10% but it may be difficult to qualify for that and there will be fees on top of that. A typical HELOC requires you to have 25% equity/down-payment and ok credit (Your credit doesn't have to be perfect... If you applied for a credit card today, would you be approved? If yes, then your credit is good enough to qualify). 5% will only get you a typical mortgage. |
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