r/HELOC

Had a sit down discussion today at BofA and the agent kind of confirmed all the things that the website said about the HELOC they offered. $0 application, $0 annual fee, and $450 to close the account if it's under 3 years. The rate from what I heard was pretty good and I'm wondering if there is anything else I'm missing in terms of cost that's not from the interests. I would really appreciate it if anyone can share any experience with getting a HELOC with BofA. Thanks!

Who did you use? What were the rates? Some of the max interest hitting 18 percent scares me, but for our situation where we don’t know exactly how quickly our home improvement projects will go or just how much we need and we can’t afford an initial 1-200k loan immediately the 10 yr draw period could be beneficial. I’m trying to look around at credit unions and found one with an intro 4.75 percent with an 8 percent max but then found out they make you pay principal up front and closing costs. Every time I feel like I’m getting somewhere there’s some sort of catch.

If you had a good experience or recently found a good rate please share where. Thank you!

Edit - located in MA, home value 570k, remaining balance 118,000. Credit score range 800-850

I'll start this off by saying that I have read a lot of posts on here in this group and others on reddit regarding people feeling hopeless and buried in debt.

My situation: I had been running a successful business making extremely good money, until COVID killed me. Part of the funds I was using to operate was credit cards, and I managed to put myself in roughly 125K debt.

The interest rate was high on some ok on others but there were 10 lines open and ALL maxed out. My monthly income was ALL going to (Mortgage, Bills, Debt) with very little left over for anything else.

I had to borrow money from friends & family all the time paying back what I could when I could, and then borrowing again.

Fortunately for me I do have quite a bit of equity in my home and I managed to never be late on any monthly payments. So even though my credit score suffered from high DTI (Debt to Income), it was still over 700 but barely.

I had to do something because I was drowning and getting very depressed.

I applied with Navy Federal Credit Union because I was told they could possibly do the loan with my Income, LTV and DTI. But the drawback was they could take 45+ days to fund.

I met quite a few people here in the HELOC group and they suggested applying with FIGURE, I applied on my own and got denied.

Then one of the people I spoke with here who was a broker that worked with FIGURE said he could get me approved same day and funded in about a week after listening to my situation and discussing my income.

I figured why not, it couldn't hurt to see what he could do. Sure enough I was approved for $200,000 HELOC at 9.35%. Closing costs weren't ideal but it was a solid option I knew I had available now.

Fast forward about 35 days, I still had the FIGURE offer sitting there waiting for me to sign closing documents with Notary as a second option to Navy Federal.

But then all of a sudden (On a Thursday) Federal Credit Union came through, $155,000 Approved at 8.5% and $0 costs for me to do the loan. Notary documents signed on Friday, and funded on Wednesday!

They sent Payoff Checks to each individual creditor themselves which saved me the hassle!

Obviously I was elated...long story short, my CC monthly payments went from $4,500+ not even making a dent to $1,500 making massive progress every month.

I want everyone here to know that you have options and even when everything seems hopeless, there is always something you can do. Something different you can try, and people out there wanting to help.

Stay positive and feel free to ask any questions you may have, I'm always happy to help or share advice! 👊🏼🇺🇸

Currently own a 3 unit multi family that I reside in and unfortunately I went into $19K in debt and would like to purchase another home. Purchased my home in 2021 then needed repairs which was completed in 2022 in all 3 units. I’ve seen online my home is valued around $538K to $635k when I bought it for $360K. Searching for a bank with a HELOC with bad credit in MA.

Does anyone know of any lenders that will provide a LOC/loan using my ESOP as collateral?
I know the general answer is no-but I’m wondering if there’s somewhere out there that will with a higher interest rate than is usual perhaps.
My situation is that I can only cash out my esop once I leave this company-but I don’t want to leave .
Approx 400k in esop, year over year is fantastic-25% last year, over 15% consistently.
No company contributions-all me.
Not publicly traded.
I need 40k like yesterday, and I am literally having to consider leaving my position to access these funds if I can’t come up with something else.
Banks won’t touch me because the only banking history I have is a couple small credit cards.
Never had a mortgage, never had any big loans (a couple around 3-5k in past)
No collections or negatives.
All payment histories on time.
My only investments or anything like that is this esop.
No rrsp.
Income 85000/year.
Low credit score due to no credit history as opposed to bad credit history
Credit score 675
40yo

I would like to find somewhere to borrow 40k, and pay back 50k in a year.
This would be ideal for me as if I stay until next years price-I would expect I will make another 100k in esop-therefore even though paying 10k on 40k is 25%-it is more than made up for with the esop i would be able to leave in.
If you have any suggestions I really appreciate it.
I’m quite stuck.

Looking at HELOCs now and have run into companies 'offering' HELOCs, but they're really Home Equity loans masquerading as HELOCs.

Chase does this by offering a HELOC but you have to immediately withdraw 80% of the HELOC. So, for all intents and purposes, it's really a home equity loan. However, they do allow an interest only payment period, so, technically, they are a HELOC.

Achieve, which an unusual number of people in this forum seem to promote, doesn't even offer the interest only payment period. I checked yesterday, and how it works with Achieve is you basically get a home equity loan with a fixed rate, but they give you all the money up front. Then the suggestion is to 'pay' all that money back, and for the next five years you can draw that sum as needed.

But you're not paying interest only at this point, you're paying interest and principal...ie, it's a home equity loan.

Checking online the difference between a HELOC and a HELON is

HELOC - flexible ongoing borrowing during draw period

HELOAN - money, up front, all at once

HELOC - interest only period

HELOAN - nope

HELOC - variable interest rate (though there is some flexibility with this with some companies)

HELOAN - fixed

There are some other differences, but these are key. So, from my understanding, Achieve is a HELOAN, not a HELOC?

Am I missing something?

Update: I did find this from the Consumer Financial Protection Bureau - a PDF describing the differences between financial options. And evidently, the interest-only payment during the draw period is NOT standard for HELOCs. Common, but not standard.

However, flexible accessing of funds during a draw period vs getting the funds as a lump sum upfront is a major difference between HELOCs and HELOANs.

https://files.consumerfinance.gov/f/documents/cfpb_heloc-brochure.pdf

There are a lot of professionals here and I would love for you to share some fun wins here as well, for the good of the group. I see a lot of great questions here, but it is hard to reply to them all.

I have a friend in the industry who refers me all of his HELOCs and prefers to just do the purchases himself. I've probably had close to 50 from him over the past few years. Most of the scenarios usually start something like this.

His buyers are in contract on a $775k purchase relocating to NV from Granite Bay, CA. The departing residence was in contract to close for both transactions to move smoothly, until it wasn't. Departing residence fell out of escrow less than two weeks before the new purchase COE. Seller was notified and immediately informed the listing agent to accept a back-up offer if this challenge is not resolved in the next 5 days. Simple text from my friend and had the client approved for a 5 day HELOC through FIGURE in 3 minutes. We only needed $85k to resolve the issue, which funded right on day 5. New purchase closed without any hiccups. Departing residence was put back on the market and within weeks received a cash offer above the original offer that fell out. Happy clients, happy branch manager who referred it. Once the departing residence closed escrow the HELOC was paid off before the first payment was even due. IMPORTANT NOTE: If you mark a FIGURE HELOC application that it is currently listed for sale, it does make the origination fee higher to avoid an EPO. A small price to pay compared to having to go through the normal and long process with banks or credit unions which would have absolutely blown the entire deal up completely. At best, had they done this another way, their EMD was long gone as all contingency dates had passed.

Most of the others I see have already been declined by FIGURE for various reasons, but I've been able to get almost all of them approved by completing the application correctly myself. The most obvious reason is simply data entry error on the income section when the borrowers are completing the app themselves. People enter the net monthly income instead of the gross annual household income and when I complete it correctly they are approved within minutes.

Please share any wins you have as well. They may help others find easy solutions to things like this that we all run into everyday. Don't underestimate the value of referrals from other lenders, who simply don't do them. Many have been burned in the past and don't want the hassle with them again. It is far easier to get a referral from another lender to save a loan for them than it is from realtors.

My wife and I are trying to consolidate some debt and we are having some trouble securing a home equity line. We are both school teachers and she was forced to take a year off from work to complete her Master's degree. We had to supplement her income with credit cards and now we are drowning trying to keep payments current. We thought the best option would be to get a home equity loan, pay the cards off, and pay the loan off over an extended period of time. The problem is that our formally outstanding credit scores have taken a major hit due to missed/late payments. My bank said that their underwriters won't even look at our application if our scores are below 620. My Dad with excellent credit is willing to co-sign for us, but I need some suggestions on a bank that would be flexible over our credit scores. Does anyone have any advice at all that may help us out?

I own my home and I just applied for a HELOC last week. Appraisal was Tuesday, 4/28 and was just a young guy walking through the house and yard taking pictures. When he left he said it would be about 2 weeks to get the appraisal completed.

This afternoon, I got an email from the lender telling me the application was denied because “deferred maintenance created unsafe home conditions”. That is just not true. Every system works, all lights go on, doors and windows are solid, water works, electric panel was just replaced and is up to code. There are no holes in the walls, no missing shingles on the roof or pest infestation. Plus, I live here every day and my home is clean and well maintained.

Called the lender who says they don’t know anything other than the loan was denied after the appraisal. Told me to call the underwriter on Monday.

I have searched through the house with a fine toothed comb and the only issues I see are maybe the carpet should be cleaned but it’s not ripped or filthy, I should repaint the front steps and maybe the deck but I see nothing that makes the place unsafe to live in. I had a dinner party last week and I have people come over all the time.

I’m so angry and sad I’m losing my mind. Do I have any recourse here? I don’t have a copy of the appraisal and the lender says they don’t know what the issue is. Am I just screwed?

Those loans are going to be the death of the housing market for the middle class. As if the middle class wasn’t already becoming more and more marginalized with each passing day to the point of near nonexistence, these lenders with HEI loans offering to tap into your equity without any payments or any FICO score requirements or any income requirements are setting us up for the most unprecedented control of wealth and real property ownership to corporations this country has ever seen.

They take a haircut on the appraisals and regardless of when you choose to pay off this loan in 10 years 20 years or 30 years, no matter what way you look at it at a 5% annual average increase in property values the banks that offer these risky loans that don’t have to adhere to policies and regulations due to there being absent a interest rate , actually end up costing tens of thousands of dollars more than a traditional HELOC would have. It’s almost borderline predatory to be honest with you and non suspecting and financially illiterate Homeowners are signing away their equity.

If you wanna do home improvement talk to me about a 203K loan that can go as low as a 585 score and you can even use rental income from an accessory dwelling unit that is proposed and not yet even built to qualify. On top of that you can’t even include six months of your mortgage payment into the new loan if you absolutely have to and you cannot live in it during construction . And you’re not limited to 80% of your equity it’s actually 96.5% of your equity after the repair value

I can also get HELOC for 620 FICOS up to 250,000 line. Don’t fall for these traps with the HEI loans.

We are licensed in California Florida Texas

Comps - 350k to 390k
Amount owed on mortgage: 48k
Fico 2,5 8 score: 772
Want to borrow: $125 for remodeling

No hassle means:

1. I don’t want an in house appraisal
2. I don’t want to pay any closing costs
3. I don’t want to have to draw out the full amount at once

I haven’t found my lender unicorn yet. Suggestions?

I'm assuming this post will be deleted, but it needs to be said:

This is not a neutral group, where you can discuss HELOCs openly. This is a group where companies can sell people HELOCs. Because of it, you're not going to get the best advice.

I posted recently on issues I had with companies portraying home equity loans as HELOCs, specially Achieve...a company that seems to be frequently mentioned in comments to this subreddit.

It was deleted by the moderator.

There are other subreddits that actually are neutral where you can get better advice. Now, I'm out before I'm banned.

I have high variable income to show over the years through bank statements, not IRS. My current fixed monthly spending on debt is around 800 per month on credit card debt from the medical history, with high rates around 28%. Roughly 20k. I'm thinking a HELOC would be the best route as a debt consolidation and to lower payments / interest rates.

My home is currently worth around 300k, and I have 150k left. 2.8%.

Where should I go to get a HELOC by using bank statements, and should I only pull enough to consolidate the credit cards and lower paymens, or other high interest payments like vehicle as well?

I recently applied for a HELOC loan for debt consolidation at my local credit union based on my loan officer’s recommendation. Their CLTV is up to 95%. I already submitted all request documents and just waiting to hear back. But I’m feeling really nervous about this process so I wanted to hear your thoughts on my approval odds:

- 750 credit score (though I did have multiple hard inquiries in the past 6 months due to personal loan inquiries for debt consolidation)

- 74% LTV

- 60% DTI; but looking to consolidate all my unsecured debt which would drop me down to 43%; this was noted by the loan officer for the application

- stable job for 4 years with a 401k but no emergency savings fund

- no missed payments

I know every place does calculations but wanted a general idea of what my approval odds look like!

I purchased a two-bed, one-bath (with an unfinished upstairs bungalow) on the edge of Detroit for $60,000 ($1,800 down) in February. I've put about $40k into the home already and expect to put $40-50k more upon realizing the extent of electrical work needed. I'm hoping to list it for 200-210k.

I have paid to fix termite damage in the basement beams, done 90% of the demo myself, and we're now beginning to re-install the kitchen and bath. I am not experienced at all in construction, so almost all of the work to put the house back together will be contracted out.

I only have about $25,000 of liquidity at this time, which would be enough to rough electrical and possibly finish both the kitchen and bath. What would be best for my situation to cover the rest of the work on the interior and finish some work on the exterior? Cash-out refinance? HELOC? I am tapped out on my DTI, so I'm assuming that home equity is the only way out of this. I am not willing to quit unless it's the last resort.

What would you do?

Problem #1. 32'x16'x one and a half story Historical Train Depot/now garage and work shop. Started to leak in spring snow melt and heavy rains two years ago. Last year leaks were obvious. Now, roof removal and new decking and maybe structural reinforcement. Had considered metal roofing before decking damage. Have not went upstairs to evaluate damage. I have debilitating depression and just do not want to know until I have a plan.

Problem #2. Lost job last August so abandoned plan to fix at that time. Have a very likely chance of work in a couple weeks. I am 64, I have not earned enough in my life so may not retire. $1,400 if I retired now. $2,200 if I work until 70yrs old so not much. I have $14,000 I can withdraw at end of year. No other retirement funds. $15,000 credit card debt.

Fact. Live in Michigan, house paid off and worth $160.000. Scared to take out a HELOC because if I do not pay back what I have borrowed before the ten year draw period ends I will not be able to afford payments and interest. Wanting to leave house debt free to sister.

Am I just hopeless?

I am looking to buy a property for STR/second home use on the beach in florida - around the $1 million mark and am not sure what my best route would be.

I'd like to pay for the property in cash and put it in an LLC. I have more than enough cash/equities to make the purchase, but they are invested and I'd rather leave the majority of the cash accounts where they are.

I would assume I could qualify for a mortgage (credit score 800, $1.5mil+ annual income, only signficant debt is $150k student loans and $1 mil mortgage on primary house) - but I would rather pay cash for the second home.

My primary residence will probably appraise for $3mil, so Heloc seems like a good option, but rates seem a bit high. Would a cash out refinance be a better option?

Is there any product that can take into account the amount of equity in my primary home, combined, with my cash accounts, and my annual income to bring the interest rate down?

Looking to take out a loan to do some work around the house and such. Contacted my current mortgage company and this is what they gave me. Is

this ok or do you think there’s better out there?

50k @ 7.87/8.38

20 year payment @ 414a month

I’m new to this. Would a heloc be a better option ?

If you were trying to get a loan from the bank and they declined it. There are other options to look into. Plenty of programs out there. Feel free to PM me any questions